In the case of United States v. Manufacturers National Bank of Detroit, Executor, 1959, the Supreme Court was tasked with determining whether or not a Michigan state law could be used to reduce federal estate tax liability. The decedent's will had established a charitable trust and directed that any inheritance or estate taxes should be paid out from the residue of his estate. Under Michigan law, this meant that these taxes would effectively come out of what would have otherwise been given to charity - thus reducing federal tax liability since charitable donations are deductible from such taxes. However, the IRS argued that this was contrary to federal law which intended for such deductions only when they were made "unconditionally" and without any corresponding economic benefit accruing back to non-charitable beneficiaries (like an estate). The Supreme Court agreed with the IRS' interpretation and held in its favor - ruling that where state laws operate in such a way as to diminish what is actually received by charities under these circumstances then it cannot be deducted for purposes of calculating federal estate tax.

In the dissenting opinion for United States v. Manufacturers National Bank of Detroit, Executor, Justice Brennan disagreed with the majority's interpretation of Section 811(c) of the Internal Revenue Code. He argued that this section should not be interpreted to include property transferred by a decedent during his lifetime in which he retained an interest until death as part of his gross estate. Instead, he believed it should only apply when there is a transfer intended to take effect at or after death. According to him, interpreting Section 811(c) broadly would lead to double taxation and contradict Congress' intent when drafting the law. Furthermore, Justice Brennan pointed out that if Congress had wanted such transfers included in one's gross estate they could have explicitly stated so but did not do so.