Steve Akers, Associate Fiduciary Counsel, Bessemer Trusts, provides the following summary of Estate of Liljestrand v. Commissioner, T.C. Memo 2011-259 (Nov. 2, 2011).
Steve R. Akers, Fiduciary Counsel
Akers@bessemer.com
November 14, 2011
Real estate properties that decedent contributed to an FLP were included in the gross estate under section 2036(a)(1) (without any discount). Highlights of the court's reasoning include:
Posted by Brian Spring, Associate Editor, Wealth Strategies Journal.
Steve R. Akers, Fiduciary Counsel
Akers@bessemer.com
November 14, 2011
Real estate properties that decedent contributed to an FLP were included in the gross estate under section 2036(a)(1) (without any discount). Highlights of the court's reasoning include:
- Decedent's revocable trust transferred almost all of his assets to the FLP (13 real estate properties were contributed)
- There were bad lapses in following formalities (for example, no bank account was opened for the FLP for two years and the FLP operated out of the revocable trust bank account)
- Purported nontax reasons rejected by the court were centralized management, preventing partition, and creditor concerns
- Factors supporting an implied agreement of retained enjoyment include contributing all assets to the FLP, disproportionate distributions, preferred interests with guaranteed payments equal to estimated income, and the FLP's payment of estate taxes.
Posted by Brian Spring, Associate Editor, Wealth Strategies Journal.
Leave a comment