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Issues: Whether the terms of the will created a trust or charge in favour of the daughters for maintenance, education and marriage expenses, so that the sums spent by the executrix were not taxable as her income.
Analysis: The will appointed the widow as executrix and conferred the income of the estate on her for life, but expressly made that enjoyment subject to the maintenance and education of the daughters. It directed that the daughters' maintenance and education expenses be met from the income of the estate and that marriage expenses be met from the corpus. The language used was imperative, not merely precatory, and the reference to trustees and the structure of the dispositions showed that the testator intended the widow to hold the income burdened with enforceable obligations in favour of the daughters. On that construction, the amounts spent for the daughters never formed part of the widow's beneficial income, and the principle distinguishing diversion of income at source from mere application of income after receipt applied.
Conclusion: The will created a valid trust for the specified purposes, and the sum directed to be excluded could not be included in the assessee's total income. The answer was therefore in favour of the assessee.
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