Van Kirk, J.:
By section 220 of the Tax Law (as amd. by Laws of 1911, chap. 732), entitled “ Taxable transfers,” it is provided (as it stood on May 1, 1915): “ A tax shall be and is hereby imposed upon the transfer of any tangible property within the State and of intangible property, or of any interest therein or income therefrom, in trust or otherwise, to persons or corporations in the following cases, subject to the exemptions and limitations hereinafter prescribed:
“1. When the transfer is by will or by the intestate laws of this State of any intangible property, or of tangible property within the State, from any persons dying seized or possessed thereof while a resident of the State. * * *
“ 4. When the transfer is of intangible property, or of tangible property within the State, made by a resident, * * * by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor or intended to take effect in possession or enjoyment at or after such death.”
A bona fide transfer of property between the living, unless made in contemplation of death or intended to take effect in possession or enjoyment at or after death, is not within the reach of the transfer tax.
The proceeds of a life insurance policy, made payable to the assured or to his estate upon his death, comes into his estate at his death, and then becomes a part of his estate. As such it is transferred as a part of his estate under his will or the intestate laws of the State. Such transfer of the proceeds is taxable. (Matter of Knoedler, 140 N. Y. 377.) But if such a policy is payable, and is paid, to some other beneficiary named, its proceeds never [263]*263come into his estate and are not taxable under the Transfer Tax Law. (Matter of Parsons, 117 App. Div. 321.)
After the assignments (not now considering the trust deeds) the trustee had the same rights in relation to the property assigned before the death of the insured as it had after. The insured did not assign the policies in contemplation of death in any sense other than in the recognition that at some time he must die, or than any person contemplates when he procures a policy payable after his death; nor, within the meaning of the statute, did he perform these acts in the transfer of property to take effect at or after death only. A man who changes the name of a beneficiary in a life insurance policy, issued on his life and payable after his death, . does not in the meaning of the statute make a transfer of property to take effect at or after death. The assignments of these policies were by instruments absolute in terms, which contained no reservations or conditions, separate from the trust deeds. The policies were delivered in Pennsylvania ■ when the assignments were made and remained there until the death of the insured. When the assignments and policies were so delivered the transaction was complete; the assignee then acquired an immediate right to the proceeds of the policies when payable; and this conclusion is not mistaken, because of the fact that, under the terms of the policies, the assured could again change the beneficiary. (Matter of Parsons, supra.) After his death the proceeds of each policy was paid to the assignee in Pennsylvania, who then stood under the assignments in the same position as if named the beneficiary in the policy. The proceeds never came into his estate.
The interesting question in this case is presented by the reservation in the trust deeds of the power to revoke the trust deeds by a formal instrument of revocation “ whereupon said trustees. shall release all right, title and interest in and to said policy which said trustees may have acquired under or by virtue of this deed or under or by virtue of any assignment of said policy executed to said trustees by me in order to effectuate the terms of this deed.” This is not a reservation of power to revoke the assignments, but the trustee, upon accepting the deeds containing this reservation, became obligated to release all claims under the assignments; and, by the terms of the deeds, the assignments and the deeds are one transaction to effectuate the plan. The appellants claim that this disposition of the policies and their proceeds is testamentary in character and the power of revocation suspended the completion of the transfer of the policies until the power could not be exercised because of death. The court, in determining whether there is here a transfer taxable under the [264]*264statute, looks at the nature and essence and effect of the transfer. (Matter of Orvis, 223 N. Y. 1.) Generally a life insurance policy is not properly acquired for the benefit of the owner; it is not an investment, or part of his estate; it returns to him no income; nor generally is it an instrument for his present or future use, but rather a contract to secure payment of» a sum after his death to another, the beneficiary named therein. The intent of the assured with respect to these policies seems plain; he acquired the several policies and assigned them to provide a trust fund for the benefit of his wife, his son and others after this death; and by the trust deeds he directed how, under what conditions, when and to whom payments therefrom should be made after his death. By his plan he was not distributing after death property valuable to him or his estate. Unless he made the contracts with the insurance companies and paid the premiums, there would be no sums coming in therefrom and, having made the contracts, except in the event of a default in payment of the premiums, the contracts of insurance would be of little value to him or his estate. If he failed to pay the premiums on the ten-year renewable term policies, they would lapse and on the four straight life policies there is but a small paid-up value. He has indeed by his trust deeds directed how the proceeds of these policies shall be distributed after death, and named the conditions under which the beneficiaries should take. But this is the effect in principle of every life policy payable at death to another than the assured or his estate. Considering the nature of the property, we do not consider that the plan of the assured should be held to be of a testamentary character. The reserved right of revocation, standing alone, is in substance the right to name a new beneficiary, which is the right which exists generally under life insurance policies. The reservation does not indicate a present intent to change his purpose or plan with reference to the policies and their proceeds. There might be many reasons why he would desire to change his trustee, or to change some of the provisions of the trust deeds. The reservation does not at all indicate that he intended to recover possession of the policies to his own use. That he has availed himself of the assignments and a trust deed to dispose of these proceeds no more indicates an intent to defeat the Transfer Tax Law than does the procuring of a life policy payable to another than himself or Ms estate. There is nothing to indicate that the grantor made the reservation, or that he intended to use it for any purpose other than to protect his beneficiaries. It has been held that, where a grantor has made an apparent transfer of his property, but withheld to himself the income during his life and such control of the property granted [265]*265as only an owner possesses, the transfer is of a testamentary nature and takes effect at death. (Matter of Dana Co., 215 N. Y. 461; Matter of Bostwick, 160 id. 489.) In Matter of Masury (28 App.
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Van Kirk, J.:
By section 220 of the Tax Law (as amd. by Laws of 1911, chap. 732), entitled “ Taxable transfers,” it is provided (as it stood on May 1, 1915): “ A tax shall be and is hereby imposed upon the transfer of any tangible property within the State and of intangible property, or of any interest therein or income therefrom, in trust or otherwise, to persons or corporations in the following cases, subject to the exemptions and limitations hereinafter prescribed:
“1. When the transfer is by will or by the intestate laws of this State of any intangible property, or of tangible property within the State, from any persons dying seized or possessed thereof while a resident of the State. * * *
“ 4. When the transfer is of intangible property, or of tangible property within the State, made by a resident, * * * by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor or intended to take effect in possession or enjoyment at or after such death.”
A bona fide transfer of property between the living, unless made in contemplation of death or intended to take effect in possession or enjoyment at or after death, is not within the reach of the transfer tax.
The proceeds of a life insurance policy, made payable to the assured or to his estate upon his death, comes into his estate at his death, and then becomes a part of his estate. As such it is transferred as a part of his estate under his will or the intestate laws of the State. Such transfer of the proceeds is taxable. (Matter of Knoedler, 140 N. Y. 377.) But if such a policy is payable, and is paid, to some other beneficiary named, its proceeds never [263]*263come into his estate and are not taxable under the Transfer Tax Law. (Matter of Parsons, 117 App. Div. 321.)
After the assignments (not now considering the trust deeds) the trustee had the same rights in relation to the property assigned before the death of the insured as it had after. The insured did not assign the policies in contemplation of death in any sense other than in the recognition that at some time he must die, or than any person contemplates when he procures a policy payable after his death; nor, within the meaning of the statute, did he perform these acts in the transfer of property to take effect at or after death only. A man who changes the name of a beneficiary in a life insurance policy, issued on his life and payable after his death, . does not in the meaning of the statute make a transfer of property to take effect at or after death. The assignments of these policies were by instruments absolute in terms, which contained no reservations or conditions, separate from the trust deeds. The policies were delivered in Pennsylvania ■ when the assignments were made and remained there until the death of the insured. When the assignments and policies were so delivered the transaction was complete; the assignee then acquired an immediate right to the proceeds of the policies when payable; and this conclusion is not mistaken, because of the fact that, under the terms of the policies, the assured could again change the beneficiary. (Matter of Parsons, supra.) After his death the proceeds of each policy was paid to the assignee in Pennsylvania, who then stood under the assignments in the same position as if named the beneficiary in the policy. The proceeds never came into his estate.
The interesting question in this case is presented by the reservation in the trust deeds of the power to revoke the trust deeds by a formal instrument of revocation “ whereupon said trustees. shall release all right, title and interest in and to said policy which said trustees may have acquired under or by virtue of this deed or under or by virtue of any assignment of said policy executed to said trustees by me in order to effectuate the terms of this deed.” This is not a reservation of power to revoke the assignments, but the trustee, upon accepting the deeds containing this reservation, became obligated to release all claims under the assignments; and, by the terms of the deeds, the assignments and the deeds are one transaction to effectuate the plan. The appellants claim that this disposition of the policies and their proceeds is testamentary in character and the power of revocation suspended the completion of the transfer of the policies until the power could not be exercised because of death. The court, in determining whether there is here a transfer taxable under the [264]*264statute, looks at the nature and essence and effect of the transfer. (Matter of Orvis, 223 N. Y. 1.) Generally a life insurance policy is not properly acquired for the benefit of the owner; it is not an investment, or part of his estate; it returns to him no income; nor generally is it an instrument for his present or future use, but rather a contract to secure payment of» a sum after his death to another, the beneficiary named therein. The intent of the assured with respect to these policies seems plain; he acquired the several policies and assigned them to provide a trust fund for the benefit of his wife, his son and others after this death; and by the trust deeds he directed how, under what conditions, when and to whom payments therefrom should be made after his death. By his plan he was not distributing after death property valuable to him or his estate. Unless he made the contracts with the insurance companies and paid the premiums, there would be no sums coming in therefrom and, having made the contracts, except in the event of a default in payment of the premiums, the contracts of insurance would be of little value to him or his estate. If he failed to pay the premiums on the ten-year renewable term policies, they would lapse and on the four straight life policies there is but a small paid-up value. He has indeed by his trust deeds directed how the proceeds of these policies shall be distributed after death, and named the conditions under which the beneficiaries should take. But this is the effect in principle of every life policy payable at death to another than the assured or his estate. Considering the nature of the property, we do not consider that the plan of the assured should be held to be of a testamentary character. The reserved right of revocation, standing alone, is in substance the right to name a new beneficiary, which is the right which exists generally under life insurance policies. The reservation does not indicate a present intent to change his purpose or plan with reference to the policies and their proceeds. There might be many reasons why he would desire to change his trustee, or to change some of the provisions of the trust deeds. The reservation does not at all indicate that he intended to recover possession of the policies to his own use. That he has availed himself of the assignments and a trust deed to dispose of these proceeds no more indicates an intent to defeat the Transfer Tax Law than does the procuring of a life policy payable to another than himself or Ms estate. There is nothing to indicate that the grantor made the reservation, or that he intended to use it for any purpose other than to protect his beneficiaries. It has been held that, where a grantor has made an apparent transfer of his property, but withheld to himself the income during his life and such control of the property granted [265]*265as only an owner possesses, the transfer is of a testamentary nature and takes effect at death. (Matter of Dana Co., 215 N. Y. 461; Matter of Bostwick, 160 id. 489.) In Matter of Masury (28 App. Div. 580; affd., 159 N. Y. 532) a father, acting in good faith and for the sole purpose of providing for his adopted sons, executed and delivered trust deeds providing that the net income of the trust was to go immediately to the beneficiaries of the trust and the principal after certain dates was to be paid over to certain parties designated therein; it was held that the trust funds were not taxable under the Transfer Tax Law; the grantor had reserved the right to revoke the trust deeds at any time during his life, but the court refused to hold that this reservation of the right to revoke disclosed the intent that the gift should not take effect in possession or enjoyment till at or after death. In the Bostwick Case (supra) the court said (p. 493): “ I think that we may have gone too far in generally affirming the Masury decision; certainly the limit was then reached, beyond which the courts could not go without emasculating the provisions of the statute.” But the Court of Appeals has not disapproved of that decision and it still stands as a decision of that court. There would have been stronger reason for that decision had the property transferred been life insurance policies and their proceeds.
By reserving to himself the dividends, so called, from the policies, he did not reserve the use of the property transferred to himself. It was specifically provided, as is usual in respect to life insurance, that he should pay the premiums, and the dividends, so called, are simply a return to him of so much of the premium paid by him as was an overcharge (above the actual cost) made upon the estimated cost of carrying the insurance for him during the period for which premium was paid. The dividends, so called, are not dividends in the usual meaning of that word. They are not a return upon an investment or on property.
The right to substitute any other policies in place of either of those assigned was simply a provision of prudent foresight (in harmony with a right he had under, the terms of the policies) and does not indicate that the insured intended to retain the property in his control or change his original purpose.
We conclude, therefore, that the assured assigned and delivered these policies before death; that the transfers of the policies and their proceeds were not made in contemplation of death, nor made to take effect in possession or enjoyment upon death only, within the meaning of the statute; that the proceeds of the policies under the assignments thereof came rightfully into the hands of the Provident Life and Trust Company of Philadelphia; that they [266]*266never became the property of the estate of the deceased, and that there has not been and cannot be a transfer of the proceeds of the policies under the will of the deceased or the intestate laws of the State.
The decision of the surrogate should, therefore, be affirmed, with costs.
Order of the surrogate unanimously affirmed, with costs.