In the case of United States ex rel. Wilhelm, Trustee, et al. v. Chain, Executrix (1936), the Supreme Court dealt with a dispute over whether or not certain funds were part of an estate and thus subject to federal taxation under the Revenue Act of 1926. The decedent had transferred money into a trust for his wife before he died; however, it was stipulated that if she predeceased him or divorced him without cause on her part then the money would return to him or his estate. His wife did predecease him and so after his death there was disagreement about whether these funds should be considered part of his gross estate for tax purposes. The court ruled in favor of Chain, holding that because there was no guarantee at time of transfer that those assets would ever come back into possession by either himself or his heirs they could not be taxed as such under existing law which only allowed taxation on transfers intended to take effect upon death where full enjoyment is postponed until then.

In the dissenting opinion for the United States Ex Rel. Wilhelm, Trustee, et al. v. Chain, Executrix case in 1936, Justice Cardozo disagreed with the majority's decision to deny a claim against an estate based on a debt that was discharged in bankruptcy prior to death of debtor but not filed until after his death. He argued that this interpretation contradicted both common law and statutory principles regarding claims against estates and debts discharged in bankruptcy proceedings. According to him, under normal circumstances such a claim would be valid if it had been properly presented within time limits set by state probate laws; however he believed that federal bankruptcy law should take precedence over these state laws when dealing with bankruptcies specifically because they are designed to provide relief from financial distress rather than punishment for failure to pay debts as per traditional legal norms.