In the United States v. Kales case of 1941, the Supreme Court ruled on a dispute involving estate taxes. The decedent had established a trust for his wife and children with himself as trustee, retaining power to manage and control investments within it until his death or resignation. Upon either event, successor trustees would take over management but could not distribute principal without consent from beneficiaries (wife & children). After his death, the Commissioner of Internal Revenue included this trust in calculating estate tax liability which was contested by executors arguing that since he did not have powers to alter beneficial interests in property transferred into trusts nor revoke them entirely; they should be excluded from gross estate calculations under Section 302(d) of Revenue Act of 1926. The Supreme Court disagreed with their argument stating that even though he couldn't change who benefits were going to or revoke trusts altogether; because he retained significant control over assets through investment decisions till death/resignation - these properties were effectively still part of his 'estate' at time-of-death hence taxable under federal law.

In the dissenting opinion for United States v. Kales, Justice Roberts disagreed with the majority's decision to uphold a tax on an estate that included property transferred by the deceased before death. He argued that this was not in line with existing laws and regulations regarding taxation of estates. According to him, under federal law at the time, only property owned by a person at their death could be taxed as part of their estate. Any transfers made during life were not subject to this tax unless they were made without adequate consideration or if they left the transferor insolvent. In his view, since neither condition applied in this case, it was inappropriate for these assets to be included in calculating taxes owed by Mr.Kale’s estate after his death.