Register of Wills for Baltimore City v. Cook
241 Md. 264, 216 A.2d 542 (1966)

  • Cook had a will that created three trusts:
    • The first was to use $10k to lobby for the passage of the Equal Rights Amendment.
    • The second was to use $25k to aid women in Maryland.
    • The third was to use the rest of the estate to further the cause of women’s equality.
    • All three trusts were held by trustees named Zetzer and Brown.
  • Cook died. Her brother challenged the validity of the bequests. The resulting settlement gave $380k total to the trusts.
  • The Maryland Department of Taxation stepped in and ordered the trusts to pay estate taxes on the $380k. Zetzer and Brown objected on the basis that these were charitable trusts and therefore exempt from taxes.
  • The Tax Court found that the trusts were tax-exempt charitable trusts. Maryland appealed.
    • Maryland argued that the bequests are not to a trust, “organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes.” Instead they are intended for lobbying efforts, which are not tax-exempt.
  • The Appellate Court affirmed.
    • The Appellate Court found that the primary purpose of all the trusts was the elimination of discrimination against women.
    • The Appellate Court found that if a trust is essentially charitable in nature, it is still charitable even though one of its purposes is to endeavor to effectuate a change in existing law.
  • Basically, in order to be a charitable trust you have to be primarily organized for a charitable purpose. You don’t have to have 100% of the trust money going to charitable purposes.
    • At the time, the Federal Government did not consider lobbying efforts to change laws to be a charitable purpose.
      • Eventually lobbyists convinced them to change their minds…