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Olsen v Commissioner of Internal Revenue

Case No. 1981-12 (U.S. Tax Ct., Apr. 2, 2014)

Respondent determined a deficiency of $482,050.80 in Federal estate tax with respect to the estate of Elwood H. Olsen, deceased.

The issue remaining for decision is whether the estate of Elwood H. Olsen is required under section 20441 to include in the value of Elwood H. Olsen’s gross estate $1,001,905.51, the value on the applicable alternate valuation date of all of the assets that a certain trust held on the date of his death. We hold that that estate is required under section 2044 to include in the value of that gross estate $607,927.51, the value on the applicable valuation date of only certain of the assets that that trust held on the date of Mr. Olsen’s death.

FINDINGS OF FACT



All of the facts in this case, which the parties submitted under Rule 122, have been stipulated by the parties and are so found except as noted below.

On February 25, 2008, Elwood H. Olsen (Mr. Olsen or decedent), who was 92 years old, died testate in the State of Florida. Elwood Ty Olsen (Ty Olsen or personal representative), one of decedent’s three children, is the personal representative of the estate of Mr. Olsen (Mr. Olsen’s estate). Ty Olsen resided in Illinois at the time he filed the petition.

Mr. Olsen received a college degree in 1938 from Morningside College (sometimes, Morningside) in Sioux City, Iowa, and a law degree in 1941 from the University of Iowa College of Law. After having served in the U.S. Navy during World War II, Mr. Olsen received a master of laws degree from George Washington University in Washington, D.C. In 1990, Morningside awarded him the honorary degree of doctor of laws.
 

 

Judge(s): Carolyn P. Chiechi
Jurisdiction: U.S. Tax Court
Related Categories: Taxation
 
Circuit Court Judge(s)
Carolyn Chiechi

 
Petitioner Lawyer(s) Petitioner Law Firm(s)
Dennis Brown
Jonathan Fellows

 
Respondent Lawyer(s) Respondent Law Firm(s)
Joel McMahan Internal Revenue Service

 

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point by an instrument in writing delivered to the trusts”. we disagree. neither those regulations nor the facts established by the certain provisions in which mr. olsen had made conditional gifts to morningside article x, paragraph 1, of the gto trust instrument, the trustee, mr. olsen, is per- of the trust, and no portion will go to our children, as would have distributed income to the settlor’s issue, per stirpes; pro- change that burden or the effect of a failure of proof. see rule 122(b); borchers v. the settlor’s death, referring specifically to the power of ms. olsen’s surviving spouse, mr. olsen, as the trustee “determines to be advis- to be split into a family trust and a marital trust. the family trust article x, paragraph 5 that provided a special power of appointment think i understand it better now. * * * * * * * such share shall be added to the principal of such other eho trust did not object to the allocations and positions that ty olsen took in ty morningside college should not be considered to have been made from the family and that the respective values of any assets that the family trust held on that date decedent mismanaged the trusts.2 - 32 - [*4] pointed mr. olsen as the trustee of that trust. the substantive terms of the [*35] ily trust to, inter alia, one or more tax-exempt charitable organizations, such of such grandchild. and maintenance of the settlor’s spouse. benefit of the settlor’s spouse, so much of the princi- and testament to any one or more of the settlor’s children or grand- the date of distribution. there shall not be allocated to this trust any olsen), and christine a. olsen (christine olsen)--and eight grandchildren. value at docket no. 1981-12. filed april 2, 2014. the date of mr. olsen’s death. as pertinent here, section 2044 requires the estate13 article x. thus, the trustee is required to “place” assets up to a the following provision in article x, paragraph 5, of the gto trust instru- another charitable contribution to morningside (june 2004 gift to morningside).7 [*6] amount of generation skipping tax exemption allocated to the settlor’s spouse as the settlor’s spouse shall ap- that letter, he, as successor trustee of the gto trust, was creating the three the fidelity account referred to in the estate tax return appears to (ii) the trustee shall, in addition, pay to or apply for the which shares shall constitute a separate trust. include in the value of mr. olsen’s gross estate $1,001,905.51, the value on the trust. restricted to refer only to a child of the settlor. count: upon facts established by the record.19 correctly determined that the prior distributions from the gto trust point by an instrument in writing delivered to the the trustee is directed as follows with respect to mar- described in a subsequent article of this trust. gift to morningside in form 1040, u.s. individual income tax return (form tate has failed to carry its burden of establishing that it satisfies the requirements mr. olsen, as trustee of the gto trust, withdrew $831,252 that he used to make (i) the trustee shall pay the net income to the settlor’s and was funding the family trust with all of the assets that the gto trust held. resolution of the issue presented under section 2044 is further complicated against mr. olsen’s estate. tribution to morningside college (may 2002 gift to morningside). in june 2004,6 cussed when i was in sioux city in may, so i want to set it forth in family trust. thus, respondent’s determination that mr. olsen’s of practice and procedure. [*10] 5. notwithstanding any of the foregoing provisions of this trust, the (iii) upon the death of the settlor’s spouse, the trustee [*11] issue so much of the income and principal of the trust come shall be allocated to such issue and shall be held by sions: as to the vanguard accounts: in may of 2002, dad transferred 2500 mr. olsen died, we conclude that those allegations are irrelevant to our resolution on december 31, 2000, the value of the gto trust had increased to as morningside college, and (2) to pay to or apply for the benefit of ms. olsen’s total $448,768.15 $544,558.66[9] gto trust instrument relating to distributions from marital trust a and marital the trustee is directed as follows with respect to marital depleted by the time elwood [mr. olsen] died, and therefore the re- in such amounts or proportions and in trust or outright and 3. the settlor intends that the value for federal estate tax purposes assets between marital trust a and marital trust b. separate and distinct trust known as the family trust. thus, pursuant to the terms any records of mr. olsen in which mr. olsen indicated (1) whether he had made tine a. olsen, in which case the current designated trustee shall [*19] fully understand the history of the gto trust in may, and i gto trust held on the date of mr. olsen’s death is includible in the value of his documents themselves. february of 2000, and the date of dad’s death, in february of 2008. eficiaries include the grandchildren. thus, there is a difference in es- - 34 - fiduciary duties as trustee of the gto trust and the actions that ty olsen took after dates of execution [november 3, 1994] and amendment [november 3, 1995] of the [eho] trust” and (2) replaced “the phrase ‘one million dollars ($1,000,000)’ in property, or the proceeds of any property, which does not qualify for what dad actually did. in fact, my guess is that he thought that it shares as there are then living children of a deceased child of the come tax under section 501(c) of the internal revenue code of 1986, ren, i suggest that you consider executing still another disclaimer, of of the death of elwood h. olsen. all rule references are to the tax court rules the terms of the gto trust required the trustee of that trust, mr. olsen, to14 of the gto trust, on ms. olsen’s death, if mr. olsen survived her, the assets of olsen’s estate tax return, mr. olsen claimed a deduction of $1,504,695 from counts, but i have pieced together what happened from the available mrs. olsen specifically created the trusts in a manner which gave mr. pay to or apply for the benefit of such child and his or her [under sec. 2010] for the benefit of her descendants”, (2) that mr. olsen breached amounts that mr. olsen had directed that that institution was to receive as the property, if any, which is required to be place[d] in a separate trust ject to election by the applicable fiduciary of the settlor’s estate to result in the elimination of any estate tax with respect to ms. olsen’s estate. in ported in ms. olsen’s estate tax return was 71.4923 percent of the total value of all except in a manner consistent with the settlor’s intentions. in further- drawals, and that mr. olsen was not permitted to appoint assets of the family have been if mr. olsen had done so. mr. olsen, the personal representative of the estate of ms. olsen (ms. assets that the gto trust held on the date of mr. olsen’s death are includible in instrument explicitly prohibited mr. olsen, as the surviving spouse of ms. olsen, trust held certain assets of ms. olsen. mr. olsen continued to serve as the trustee trustee during such spouse’s lifetime or by such spouse’s last will ance of said intention, the trustee shall, upon demand of the settlor’s gross estate. [*23] the withdrawals were made was just under $1.5 million, versus trust b”. the trustee shall place in marital trust a trust assets hav- records in what i consider to be a satisfactory way. gto trust held on the date of mr. olsen’s death is includible in the value of his i hereby allocate the assets held by the gto trust in vanguard ac- on account of a then living grandchild who has attained the age of the issue, per stirpes, of such deceased grandchild. each share cre- (c) upon the death of such grandchild, the trustee shall pay sumably within a reasonable time after the death of the settlor, and organizations exempt from federal income tax (tax), such as morningside college. distributions from the family trust. gto trust instrument provides that the assets of the gto trust are that part or all of the assets currently held in the gto trust’s account mr. olsen’s estate and the successor trustee of the gto trust, took after mr. olsen gto trust withdrawals that he made in may 2002 and june 2004. assets currently held in the gto trust will be distributed to the three separate and distinct trusts, marital trust a, marital trust b, and the family trust, date of gift 12/29/00 - 18 - able to provide for the health, education, support and mined was the value of the gto trust “as of decedent’s date of death” that is11 mines to be advisable to provide for the health, education, support include in the value of mr. olsen’s gross estate $716,285.29, the value on the gations regarding ms. olsen’s intent expressed in the gto trust instrument, suf- death and that was to be divided into and funded as two separate and distinct trusts trust assets. since all of the assets of the marital trust have been (iii) upon the death of the settlor’s spouse, the trustee settlor’s spouse does not exercise this power to ap- in a separate trust or distributed pursuant to any preceding article) that totaled $1,474,780 (gto trust withdrawals). in may 2002, mr. olsen, as4 5 the estate counters respondent’s argument about mr. olsen’s authority un- ms. olsen’s estate tax return, mr. olsen, the personal representative of her estate, total $390,586.78 - 6 - spouse is a special power of appointment and the settlor’s spouse is of appointment, the trustee shall distribute the trust prop- he did withdraw income from time to time, and i have not gone over the assets in the hannauer account appear to have been transferred to and principal of the trust as the trustee deems necessary to continue to serve. stipulation of facts to certain stipulated paragraphs therein and certain stipulated years. olsen’s gross estate. - 26 - shall divide the family trust into as many equal shares as there are trustee during such spouse’s lifetime or by such spouse’s last will a letter to nielsen a couple of weeks ago, asking if he had any record 1219.96 sh van kampen hi-yield fd 12,904.33 11,031.31 the trustee shall distribute the trust property to the settlor’s family members. at the time of dad’s death, the vanguard accounts trustee in a separate trust in accordance with the following provi- with northern trust securities are subject to estate tax. if so, we will for the 3179.74 shares of the putnam american government fund so lation of facts. the court has given the weight, if any, to those stipulated para- trust and be governed accordingly. [*12] ceased grandchildren who have left issue then surviving. each share the eho trust (1) reduced the bequest under that trust to morningside by the erty to the issue of such deceased grandchild, per stirpes, estate $1,001,905.51, the value on the applicable alternate valuation date of all of - 2 - ing a value of one million dollars ($1,000,000.00) reduced by the [*26] the beneficiaries of the gto trust who were also the beneficiaries of the that dad had not split up the assets as of the end of the year 2000. in authority granted to him under article x, paragraph 5, of the gto trust instrument morningside college totalled about $1.09 million. the withdrawals shall pay the income for the period between the last during mr. olsen’s lifetime after ms. olsen’s death, mr. olsen did not, as no other large withdrawals were made from the northern trust elwood h. olsen (“mr. olsen”) and his predeceased wife grace t. of the assets that mr. olsen reported in that return that the gto trust held on the alternate valuation date was $1,001,905.51, not $1,071,224 as respondent death, that the marital trusts should be considered to have held all of the assets of had accordingly been closed. - 27 - university of iowa college of law. after having served in the u.s. navy during respective amounts withdrawn to morningside college are consistent with the [*29] in june 2004, mr. olsen, as trustee of the gto trust, withdrew $831,252 two respects. those amendments (1) eliminated from the eho trust instrument putnam american government fund, are accordingly family trust (2) $504,695 to marital trust b; and (3) $600,000 to the family trust. the parties incorrectly stipulated the total of the three significant with-4 settlor, if the settlor’s spouse predeceases the settlor, the trustee moot. this represents a change in certain respects of some things we dis- - 37 - would not have withdrawn assets from the family trust unless [ms. olsen’s] spouse.” on the record before us, we are persuaded that ms. olsen which to the marital trust. it remains possible that dad did make a and testament to any one or more of the settlor’s children or grand- - 7 - of the issue presented under sec. 2044. see estate of soberdash v. commissioner, estate tax marital deduction * * *” article viii, section 1. on february 25, 2008, elwood h. olsen (mr. olsen or decedent), who was olsen’s gross estate under section 2044 the $1,071,224 which respondent deter- shares as there are then living children of the settlor and deceased $1,080,802 that mr. olsen, as trustee of the gto trust, made in may 2002 and absolutely necessary, and in fact it never was absolutely necessary. trust securities account maintained by the gto trust are family struggled with this issue. maintenance of the settlor’s spouse. principal from those trusts as authorized by article viii, paragraph 6(a)(ii) and child or issue. olsen’s estate. in that notice, respondent determined to include in the value of mr. and/or the family trust. estate of elwood h. olsen, deceased, elwood t. olsen, ruary 2006 and that he deposited into one of his accounts should be considered to23 it is respondent’s position that the estate is required under section 2044 to the settlor’s spouse as the settlor’s spouse shall ap- first, this is different from the approach i proposed in may, in that the the terms of the gto trust provided in pertinent part in article x the fol- trustee during such spouse’s lifetime executed after estate. in that return, mr. olsen reported that the total value of the assets that the3 in his files of what had been done. i got a call from nielsen yester- and principal of the trust as the trustee deems necessary to then living children of the settlor and deceased children of the settlor $1,504,695, were to pass to mr. olsen, ms. olsen’s surviving spouse. in ms. $249,550 that he used to make a charitable contribution to morningside college.16 (b) upon the death of such child, if such child is survived by ed from appointing to such child, or the creditors of such fidelity acct 49,219.77 cussed earlier. and i think that the allocation i make here is the only gto trust held on the date of ms. olsen’s death was $2,104,695 and that those management of the trusts has no bearing on the inclusion of qtip we have considered all of the contentions and arguments of the parties that as to simplify matters to the extent possible. the dollars match up so graphs and those stipulated exhibits that the court considered appropriate. age of twenty-one (21) years shall be distributed to such grandchild, [a]ll of the [gto] trust assets remaining at decedent’s death are are not includible in the value of his gross estate, and that, as discussed below, it - 5 - such a split--a document in a safe deposit box or a letter to an attorney der article x, paragraph 5, of the gto trust instrument by contending, inter alia, 1997 wl 438763, at *3. moreover, on the record before us, we find that the estate authority granted to him under article viii, paragraph 6(a)(ii) and (b)(ii), of the of his accounts, is consistent with article viii, paragraph 6(a)(ii) and (b)(ii), of the gto trust to require the trustee of that trust, mr. olsen, to distribute the principal $393,978 that he deposited into one of his accounts. summer of 2004, he transferred to morningside college the following drawals from the gto trust to be $1,479,780. the correct total is $1,474,780. applicable alternate valuation date of 71.4923 percent of the assets that the gto account after sometime in 2002. child for whom such trust is created shall be the sole trustee of such split up of assets be made “on the death of the settlor” means pre- more of such child’s children or grandchildren. the power sh of the vanguard 500 index fund, held by the gto trust, to tative of mr. olsen’s estate and the successor trustee of the gto trust, did not find 2000. the assets in the gto trust on december 31, 2000, and their 1. on the death of the settlor, if the settlor’s spouse survives the - 10 - - 16 - able to provide for the health, education, support and [*36] * * * * * * * ment and the settlor’s spouse is expressly precluded from appointing subject to estate tax on dad’s death, as part of his estate, and the ben- of appointment herein granted to such child is a special directions regarding the funding of certain shares in a certain trust known as the survivorship with respect to jointly owned property, under settlement mr. olsen and ms. olsen had three children--ty olsen, le t. olsen (le northern trust securities account $544,558.66 (12/29/00 value)[10] this sets forth an allocation of assets which i, as successor trustee, for each of marital trusts a and b. dad did file a gto trust tax $395,103.31. the purpose was to raise cash to make annual gifts to gross estate, the estate argues on brief that the gto trust trust b”. the trustee shall place in marital trust a trust assets hav- olsen’s september 30, 2008 letter. family trust and (2) with the estate that $393,978 of those withdrawals should21 result in an increase in state death taxes otherwise payable. be considered to have been made from the marital trusts. ms. olsen’s intent, as22 (ii) the trustee shall, in addition, pay to or apply for the trust, that the family trust had not been funded at the time of the gto trust with- his spouse, grace t. olsen (ms. olsen), who also received a college degree from provide for the health, support, education and maintenance trustee, mr. olsen, determined to be advisable to provide for the health, education, grandchild. if such grandchild dies before attaining the age right, but such share shall be added to the principal of such 6373.742 sh vanguard morgan grwth 98,793.00 frequently than annually. (a) all other items of property includable in the settlor’s gross estate lished by this article shall not receive his or her share out- a separate trust in accordance with the following provisions: spouse shall appoint by an instrument in writing delivered to the able time. but there is nothing in the trust instrument which appears (1) whether mr. olsen had made the gto trust withdrawals pursuant to a particu- “trust property” shall include all property held in trust under this february 21, 2006, mr. olsen, as trustee of the gto trust, withdrew $393,978 that (a) marital trust a. family trust to, inter alia, one or more tax-exempt charitable organizations, such separate and distinct trust on ms. olsen’s death: one which makes sense in light of mom’s and dad’s estate plan and olsen’s spouse survived her, the trustee was to transfer certain assets of the gto ther since we discussed the issue in may. i went again through dad’s to such selfsame spouse, or the creditors of such spouse, or the estate three respects. on the same date, ms. olsen amended the terms of the gto trust his own tax returns. this was technically incorrect but probably did any, are marital trust assets, subject to estate tax and distributable to years. required him to do so. in that letter, ty olsen further advised his siblings that, by8 have been stipulated by the parties and are so found except as noted below.2 provide for the health, support, education and maintenance trust, or otherwise; and (b) the amount necessary to increase the set- - 28 - benefit of the settlor’s spouse, so much of the princi- or the beneficiaries would be sufficient. i have investigated this fur- ered to have held any assets of the gto trust on the date of mr. olsen’s death, that olsen did not include any portion of the value of the gto trust in the value of mr. trusts based on the settlor’s [ms. olsen’s] intent expressed in grace’s olsen (“mrs. olsen”) as generous contributors to morningside col- per stirpes, of such deceased grandchild’s parent and, if no ____________ vanguard accts 986,022.69 mr. olsen’s death are includible in the value of his gross estate under section 2044 and which pass or have passed to the settlor’s spouse under other known as the “marital trust” an amount equal to the maximum who have left issue then surviving, each of which shares shall consti- to reflect the foregoing, according to the estate, sec. 20.2044-1(d)(3), estate tax regs., “supports20 _________________ _________________ gift to morningside in form 1040 that he filed. (12/31/04 value), so that the total value of the withdrawals plus the withdrawals totaling $1,080,802 that mr. olsen, as trustee of the gto trust, made deduction less the value for federal estate tax purposes of the sum of ceased child of the settlor shall be held or disposed of in accordance of the family trust as her surviving spouse, mr. olsen, appointed to charitable tion allowed by the federal estate tax law applicable at the settlor’s pal of this trust as the trustee determines to be advis- your interest in the family trust created under article x of the gto - 20 - because he had “taken care of morningside college by gifts made after the trust b: $790,000. the details are as follows: the northern trust securities account had a value of $1,043,437.75 [*14] family trust that was to be funded on mr. olsen’s death with certain is required under section 2044 to include in the value of elwood h. olsen’s gross1 the gto trust, made the following three significant withdrawals from that trust by the following facts. after ms. olsen died mr. olsen, as trustee of the gto on september 30, 2008, after mr. olsen’s death, ty olsen, who is not only [gto trust withdrawals] were properly appointed pursuant to mr. possible. the purpose of mom and dad’s estate plan was to [*15] $1 million in marital trust a and $504,695 in marital trust b, or a total of counts and all of the assets dad withdrew from the gto trust and of the eho trust. estate of such child. [the marital trust] or distributed pursuant to any preceding article,” gto trust relating to distributions from marital trust a and marital trust b, re- lar provision or authority granted in the gto trust instrument and (2) whether the donations would continue by including the gto trust provisions in stallments, to be paid to the settlor’s spouse not less olsen’s] estate plan [i.e., the gto trust instrument] to utilize her unified credit ital trust a: split, but if so the record of it has been lost. income distribution date and the date of the death of analyzing them. i do not have good records for the vanguard ac- the value of qtip assets in ms. olsen’s gross estate that mr. olsen re- the conclusion is that the assets withdrawn from the gto trust were - 35 - * * * * * * * no special formality which needs to be followed in order to make spouse shall appoint by an instrument in writing delivered to the spouse’s estate. the trustee shall pay the then re- withdrawal that we have found mr. olsen made from the marital trusts in increase overall estate tax if they came out of the family trust, but withdrawals [gto trust withdrawals] depleted the family trust is 2002 and $831,252 in june 2004, or a total of $1,080,802, and contributing the death and all questions in connection with this separate trust shall be olsen with the authority as her surviving spouse (1) to appoint principal of the hanauer acct 41,000.00 (est) of the estate of such spouse, except to the extent otherwise specifi- and fund after ms. olsen died three separate and distinct trusts, marital trust a, $1,504,695. the remainder, about $1.2 million, should have gone to record support that assertion of the estate. in this connection, we note that the es- spouse, convert or make productive any unproductive property held in trust b, respectively. “marital trust” an amount equal to the maximum estate tax marital tlor’s spouse does not exercise this power to appoint, other trust and be governed accordingly. for purposes of vanguard accounts 986,022.69 (estate t[a]x value) of us, regardless of what the irs does. the irs may claim that it is decedent’s gross estate by claiming, with no evidentiary support, that - 8 - the extent otherwise specifically provided for under this article [x]. arate and distinct trusts known as marital trust a and marital trust b and (2) a source(s) of the gto trust withdrawals had been marital trust a, marital trust b, made a qtip election under sec. 2056(b)(7) and claimed a marital deduction of tute a separate trust. each share created on account of a living child dent’s estate, filed form 706 (mr. olsen’s estate tax return). in that return, ty shall be distributed to such child free of this trust. we agree with the estate that the withdrawal of $393,978 that mr. olsen,22 minimize estate tax, and withdrawals from the gto trust would children, charitable trust or organization which is exempt from in- necessary to claim a marital deduction under sec. 2056(a) in an amount that would - 12 - “on the death of the settlor [gto], if the settlor’s spouse sur- chiechi, judge: respondent determined a deficiency of $482,050.80 in sources of the gto trust withdrawals totaling $1,474,780 in 2002, 2004, and spouse’s estate. the trustee shall pay the then re- return for 2000, which appears to have included all income from the lifetime gifts to members of ms. olsen’s family. remaining assets in the northern trust securities account at the time than in effect to leave it open pending irs review, as we had dis- taxes. ty olsen’s september 30, 2008 letter stated: would be estate-tax-neutral if they came out of the marital trust. dad 2. each share created on account of each living child of the set- based upon our examination of the entire record before us, we find that the trustee shall distribute the trust property to the issue, of sec. 20.2044-1(d)(3), estate tax regs. support, and maintenance of that surviving spouse. this article shall not receive his or her share outright, but and maintenance of the settlor’s spouse. child’s lifetime or by such child’s last will to any one or the gto trust on that date, and that consequently the respective values of all of the (d) notwithstanding any of the foregoing provisions of this for the benefit of such grandchild so much of the income of an exemplary philanthropist. mr. and mrs. olsen’s pattern of college, including gifts in significant amounts. settlor (hereinafter “grandchild” or “grandchildren”) and deceased have gone into the wachovia transfer-on-death account, which was children, charitable trust or organization which is exempt from in- is required under section 2044 to include in the value of that gross estate in one respect. - 13 - free of the trust. each share created on account of the then living in 2004, the value of vanguard accounts held by the gto trust was trust, and the record of his doing so has been lost. assuming that he trust, made the following three significant withdrawals from that trust that totaled not substantially affect the resulting total tax liability. a few closing remarks: - 39 - any event going to be part of his estate--the marital trust assets--so and if no issue of such deceased grandchild is then living, (a) the trustee, in its sole and uncontrolled discretion, may have been made from the family trust. article x, paragraph 5, of the gto trust the underlying problem is one which we discussed in may. the as the trustee deems necessary or advisable to provide for separate and distinct trusts, marital trust a, marital trust b, and the family trust, was ms. olsen’s intent, as explicitly provided in article x, paragraph 5, of the assets remaining in the gto trust, if any, are family trust assets, not issue of such deceased grandchild’s parent is then living, died, including his action to allocate “the remaining $1,001,905.51 balance of trust. it is not material to our resolution of the issue presented under section 2044 federal estate tax purposes shall control. the trustee shall have the property shall be distributed to marital trust b. the trustee is children of the settlor who have left issue then surviving, each of - 29 - a separate trust in accordance with the following provisions. the of such spouse, or the creditors of the estate of such spouse, except to 3. each share created on account of the then living issue of a de- 2. in computing this amount, values as finally determined for property that the eho trust held at that time. separate trusts to be referred to as “marital trust a” and “marital the family trust and that $393,978 of those withdrawals are considered to have - 33 - tlor shall be allocated to such child and shall be held by the trustee in trust to (1) a so-called marital trust that in turn was to be divided into two sep- withdrawals. mr. olsen’s actions of withdrawing from that trust $249,550 in may purposes: to make charitable gifts to morningside college and to the family trust. but since the return reported all of the income of family trust. - 3 - 8400 sh ge $254,604.00 $402,678.92 time to time, pay to or apply for the benefit of the settlor’s spouse, so spectively. since separate returns should have been filed for the family trust and joel d. mcmahan, for respondent. been the case if some of the assets were marital trust a assets. [*39] applicable alternate valuation date that respondent determined to consist income distribution date and the date of the death of credit” of $192,800, mr. olsen reported zero tax in ms. olsen’s estate tax return. morningside college. the value was $249,550. in addition, in the under such conditions as such child shall appoint by an in- qualify for the marital deduction, or which is subject to foreign death for federal estate tax purposes which qualify for the marital deduction correct, both as a matter of law and on the face of the gto trust1 the value of his gross estate, respondent argues in respondent’s opening brief: did make the split, it is almost certainly the case that the assets make gifts to family members. the total withdrawals for see supra note 11. the parties agree that the value of all of the assets that12 morningside college, had a history of making charitable gifts to morningside purposes of this provision, the term “parent” shall be eho trust and the gto trust are identical. marital deduction, article viii, grace t. olson [sic] revocable trust” of assets from the gto trust tax returns filed since mom’s death, ton university in washington, d.c. in 1990, morningside awarded him the hon- able to provide for the health, education, support and maintenance of the settlor’s that he used to make another charitable contribution to morningside. on17 the settlor (hereinafter “grandchild” or “grandchildren”) and de- subsequent years, dad included all of the income to the gto trust in [*31] in support of the estate’s position that the value of none of the assets of the the marital trust should have been funded on or about december 31, (sometimes, morningside) in sioux city, iowa, and a law degree in 1941 from the discretionary distributions of income or principal from the family trust under upon the death of the settlor’s spouse, or upon the death of the letter he had written to dad reminding him to make the split. i wrote gto trust instrument explicitly authorized mr. olsen, as trustee of that trust, to in ms. olsen’s estate tax return, mr. olsen reported in schedule m-- of the property of this trust shall be available for the marital deduc- when such grandchild attains the age of twenty-one (21) * * * * * * * article x, paragraph 1, of the gto trust instrument before the trustee had exhaust- contributed to morningside college in the summer of 2004, except ries are the children (ty, le and chris). the marital trust assets are the $1.637 million estate tax value. at the time of dad’s death, the (c) in the event no issue of such deceased child is then living, the gto trust, was permitted to appoint to morningside college $1,080,802 of the transfer to marital trust a and marital trust b the minimum pecuniary amount second, i changed my mind about this because i think i am obligated - 14 - is then entitled to the income under any other trust estab- subsequent article of this trust. that mr. olsen did not have an inter vivos power of appointment over the family it is respondent’s alternative position that the family trust should be18 beneficiary of a certain annuity account and certain retirement accounts that he by the fact that dad withdrew a substantial part of the asset of the withdrawals was/were marital trust a, marital trust b, and/or the family trust. (...continued)19 the proposition that the [gto trust] withdrawals can be treated by elwood’s certain value in the marital trust “on the death of the settlor”, and instrument, except that property, if any, which is required to be placed strument in writing delivered to the trustee during such deemed to hold 28.5077 percent of the assets that the gto trust held on the date trust (eho trust). he appointed himself as the trustee of that trust. on the same the trustee shall distribute the principal of this trust as the settlor’s per stirpes, of such deceased grandchild’s parent, and if no commissioner, 95 t.c. 82, 91 (1990), aff’d, 943 f.2d 22 (8th cir. 1991). ters, since their interests are affected, and since i want to keep them did not intend that the trustee make, and that the trustee did not make, any such 3. each share created on account of the then living issue of a __________ june 2004 and that he used to make charitable contributions to morningside col- the terms of the gto trust provided in pertinent part in article ix the with respect to the estate’s allegations regarding mr. olsen’s breaches of his and testament, to any one or more of the settlor’s children or grand- dad that he needed to make the split. that letter referred to another [*2] the issue remaining for decision is whether the estate of elwood h. olsen in the summer of 2004, dad transferred to morningside college the 5. notwithstanding any of the foregoing provisions of this trust, separate trusts to be referred to as “marital trust a” and “marital for other purposes, including gifts to family members, totalled about [*13] other trust and be governed accordingly. for been made from the marital trusts. on that record, we further find that the estate the trustee shall distribute the trust property to the issue, issue of a deceased grandchild shall be distributed free of this trust to t.c. memo. 2014-58 subject to estate tax, and distributable to the children, and which, if - 11 - ceased child of the settlor shall be further divided into as many equal visions of section 3 of this article. at the respective times mr. olsen, as trustee of the gto trust, made the5 trustee during such spouse’s lifetime executed after gto trust. the return used the employer identification number of the amendments that mr. olsen made on november 3, 1995, to the terms of mr. olsen, as trustee of the gto trust, did not (1) segregate the gto trust into the sets that that trust held on the date of mr. olsen’s death. 6. the trustee is directed to divide the marital trust into two (2) herein given to the settlor’s spouse. upon the death withdrawal of $393,978 that mr. olsen, as trustee of the gto trust, made in feb- 2 of this article. each share created on account of issue of a de- estate tax return to the extent necessary to reduce that estate’s estate tax liability to (a) the trust property shall be distributed to such grandchild that trust were to be distributed to the following three separate and distinct trusts whatever way you see fit. his fiduciary duties as trustee of the gto trust, and (3) that the beneficiaries of respondent reserved relevancy objections in the parties’ supplemental2 herein given to the settlor’s spouse. upon the death respondent stipulated that the value of the gto trust on the applicable11 stallments, to be paid to the settlor’s spouse not less jonathan b. fellows and dennis c. brown, for petitioner. referring specifically to the power herein given to such as amended, at the time of each transfer. the power of appointment charity and for his personal benefit in accordance with the provisions in support of respondent’s position that the respective values of all of the has always been, invested primarily in high quality bonds and mutual orary degree of doctor of laws. bequests, etc., to surviving spouse (schedule m), that pursuant to a “formula (c) upon the death of such grandchild, the trustee shall pay dollars ($2,000,000),’ so as to take advantage of current limits on tax-favored trust, and (2) fund them, as required by the terms of that trust. as a result, resolu- maining balance of grace’s trust would be allocated to the family are not discussed herein, and we find them to be without merit, irrelevant, and/or trust. i got from northern trust securities account statements going not make the split. the language of the trust instrument is as follows: $1,474,780. in may 2002, mr. olsen, as trustee of the gto trust, withdrew15 of all of that institution’s business operations. sometime thereafter, he served as three separate and distinct trusts, marital trust a, marital trust b, and the family (ii) the trustee shall, in addition, pay to or apply for the lege, are consistent with article x, paragraph 5, of the gto trust relating to the assets that a certain trust held on the date of his death. we hold that that estate mr. olsen claimed a charitable contribution deduction for the may 200216 for the benefit of such grandchild, so much of the income not bound by the allocation of assets made here and take the position mr. olsen received a college degree in 1938 from morningside college lowing with respect to the family trust that was to be created and funded as a in may 2002 and june 2004 and that he used to make charitable contributions to [*34] on the record before us, we agree (1) with respondent that $1,080,802 of [*30] it is the position of respondent that the family trust should not be consid- see sec. 2044(a) and (b)(1)(a). gift to morningside in form 1040 that he filed. 2599.98 sh aim aggressive grwth fd 24,855.91 33,201.74 - 30 - trust, with the exception of any trust created on account of chris- positions of the gto trust in vanguard funds: distributed to you shortly after dad’s death. 6. the trustee is directed to divide the marital trust into two (2) - 9 - erty to the issue of such deceased grandchild, per stirpes, gto trust from the trust. so the resulting question is, which of the were to be distributed to marital trust a and marital trust b. (we shall some- spouse during such spouse’s lifetime in periodic in- siblings that it appeared that mr. olsen, as trustee of the gto trust, did not create federal estate tax with respect to the estate of elwood h. olsen, deceased. distribute principal of the marital trusts to himself as ms. olsen’s spouse: [*7] (b) marital trust b. northern trust securities acct $1,637,053.09 ms. olsen of making significant gifts to morningside college. with respect to the respective assets that pursuant to the terms of the gto trust 1896.781 sh vanguard explorer $129,189.75 section 2056(b)(7) as qualified terminable interest property or qtip.) in ms. trust, did not provide any accountings for the gto trust withdrawals to that trust’s (1) that “[r]espondent’s position contravenes the intent expressed in grace’s [ms. shall pay the income for the period between the last right, but such share shall be added to the principal of such tions and as a part of the generation skipping trust memorandum findings of fact and opinion and ms. olsen were beneficiaries of marital trust a, marital trust b, and the olsen’s estate tax return, mr. olsen made an election under section 2056(b)(7) [*32] tal trusts * * *, the marital trusts were thereby effectively[20] of appointment, the trustee shall distribute the trust prop- i think that i, as successor trustee under the gto trust, am still obli- 366.992 sh vanguard u.s. grwth 5,759.11 rule 155. maining principal according to the terms and condi- trust for his personal benefit. power of appointment and such child is expressly preclud- tion of the issue presented under section 2044 is not as straightforward as it would 2006, respectively, were marital trust a and marital trust b. referring specifically to the power herein given to such illinois at the time he filed the petition. date of ms. olsen’s death. 5. notwithstanding any of the foregoing provisions of this trust, third, if you think that my decision is incorrect, or if you otherwise of the grace t. olsen revocable trust (“gto trust”) in that mr. and olsen’s inter vivos power of appointment from the family trust to required by the terms of the gto trust, (1) segregate the gto trust into the three northern trust securities account had a value of $1,069,952.40 grandchildren who have left issue then surviving. each share created [decedent’s] personal representative as having been made from the marital [*33] magnanimous charitable donations is consistent with the terms herein granted to the settlor’s spouse is a special power of appoint- total $1,530,581.35 of such spouse, or the creditors of the estate of such spouse, except to maintenance of the settlor’s spouse. eight years after death may not be considered to be within a reason- during mr. olsen’s lifetime after ms. olsen’s death, mr. olsen, as trustee of some detail. i have been thinking about this all summer; i did not 1. the trustee shall divide the trust property into as many equal made by the settlor during lifetime. the remaining trust property only to a child of the settlor. on the record before us, we reject the estate’s argument that the gto trust the amendment that ms. olsen made on november 3, 1995, to the terms of account of each other living grandchild shall be held by the trustee in the trust property to such person or persons or the estate of 1005.025 sh eaton vance prime res 43,286.81 9,547.74 trust to charitable trusts or other § 501(c)(3) organizations. * * * zero, that, as the parties agree, any assets in the family trust at mr. olsen’s death february 2006. lowing with respect to the marital trust that was to be created on ms. olsen’s united states tax court relating to distributions from the family trust and not consistent with the24 and if no issue of such deceased grandchild is then living, the trustee in a separate trust in accordance with the pro- that trust had claims against the estate because of those breaches that they did not mitted to make discretionary distributions of income and principal for the benefit the trustee is directed as follows with respect to marital issue, per stirpes, provided that an issue of the settlor who known as marital trust a and marital trust b: contributed, to the marital trust. the remainder of the assets in the a and marital trust b (sometimes collectively marital trusts) held on the date of the gto trust held on the applicable alternate valuation date was $1,001,905.51. resolved accordingly. to this end, the powers and discretions of the transfers made by the settlor during lifetime. the remaining trust respect to the transfer of the property to him by reason of section 2056(b)(7).14 of the gto trust after ms. olsen’s death until his death on february 25, 2008. trust, the trustee shall distribute the principal of this trust it is respondent’s alternative position that under estate of soberdash v.13 trustee shall distribute the principal of this trust as the settlor’s (b) marital trust b. shall be held in trust or disposed of as follows: exhibits referenced in those paragraphs and attached to that supplemental stipu- see supra note 9.10 [w]ithdrawals should be treated as having come from the marital following with respect to the so-called generation skipping trust to which, pursuant to article viii, paragraph 6.(a)(iii), the remaining principal of marital permitting mr. olsen, as trustee, to distribute principal of the family (2/29/08 value). the northern trust securities account is now, and to include in the value of mr. olsen’s gross estate the value of any property in entirely of assets of the marital trusts, reduced by $393,978, the gto trust generation skipping trusts.” mr. olsen claimed a charitable contribution deduction for the june 20047 grandchildren? with section 3 of this article. the family trust should be considered to have held all of the assets of the gto vided, however, than an issue of the settlor who is then tlor’s taxable estate sufficiently to fully utilize all available credits for letters advising dad to make the split but had not found anything the trustee shall distribute the trust property to the settlor’s mr. olsen’s actions are also consistent with the history of mr. olsen and24 the value of his gross estate.18 - 38 - times refer to the assets with respect to which mr. olsen made an election under estate, did not find any records of mr. olsen in which mr. olsen indicated in fact, mr. and mrs. olsen ensured that their pattern of charitable olsen’s estate), signed and filed form 706, united states estate (and generation- maining principal according to the terms and condi- such grandchild, as such grandchild shall appoint by a will $2,664,583.78. the trust property to such person or persons or the estate of all section references are to the internal revenue code in effect on the date1 gto trust withdrawals he held certain funds in his individual name or in the name to such selfsame spouse, or the creditors of such spouse, or the estate mr. olsen claimed a charitable contribution deduction for the may 20026 (a) marital trust a. skipping transfer) tax return (ms. olsen’s estate tax return), for ms. olsen’s - 36 - back to the year 2000, and i have spent some time examining and [*8] upon the death of the settlor, the trust property (the words - 15 - settlor, the trustee shall place in a separate trust to be known as the trust a was to be transferred on the death of ms. olsen’s surviving spouse: expressed in the gto trust instrument that she created, included providing mr. surviving spouse, mr. olsen, so much of the principal of the marital trusts as the trust a: in the respective amounts that the terms of that trust required: (1) marital trust a, the terms of the gto trust directed that on ms. olsen’s death, if ms. gto trust will be distributed to the three of us, in equal shares, free disclaimer form. you should let me know as soon as possible. this provision, the term “parent” shall be restricted to refer gated to split up the assets of the gto trust, assuming that dad did of the settlor’s spouse, if or to the extent that the set- (b)(ii), of the gto trust instrument. - 31 - it is the position of the estate that the marital trusts should not be consid- issue of such deceased grandchild’s parent is then living, trust held on the date of mr. olsen’s death. see infra note 18. wish your share of the gto trust assets to go directly to your child- ated on account of each other living grandchild shall be held by the percent of the assets that the gto trust held on that date. see supra note 13. - 19 - the issue presented under sec. 2044 and that we do not address in any detail are (b) pending final distribution, the trustee shall pay to or apply the settlor’s death, referring specifically to the power the extent otherwise specifically provided for under this article. (a) the trust property shall be distributed to such grandchild when such grandchild attains the age of twenty-one (21) values on that date, were essentially as follows: from dad stating which assets were allocated to the family trust, and fifth, i apologize for being slow on this. my excuse is that i have over the years, should be treated as family trust assets, to the extent morningside college was just over $640,000. after the withdrawals the trustee is directed as follows with respect to marital taken on the estate tax return filed on behalf of mom’s estate, of the settlor’s spouse, if or to the extent that the (b) pending final distribution, the trustee shall pay to or apply the trustee shall distribute such income to such the records in sufficient detail to exclude smaller withdrawals in con- benefit of the settlor’s spouse, so much of the princi- - 22 - morningside’s vice president of business until he retired in 1978. mr. olsen and vives the settlor, the trustee shall place in a separate trust to be - 23 - $1,080,802 of the gto trust withdrawals are considered to have been made from date, ms. olsen created the grace t. olsen revocable trust (gto trust). she ap- trustee of the gto trust, withdrew $249,550 that he used to make a charitable con- notice, as modified, is erroneous. see rule 142(a); welch v. helvering, 290 u.s.12 [s]ection 2056(b)(7)(b)(ii)(ii) prohibits a person from having a1 of such grandchild. of the eho trust. marital trust b, and the family trust, although the terms of the gto trust expressly precluded from appointing to such selfsame spouse, or the this trust. commissioner of internal revenue, respondent amount of generation skipping tax exemption allocated to transfers did not carry its burden of establishing (1) that mr. olsen breached any such duties funds; this accounts for its stable value over the years. created on account of a then living grandchild who has attained the $607,927.51, the value on the applicable valuation date of only certain of the as- he made a written record of his decision, however, it is now lost. should have been funded at an amount equal to the marital deduction the following provisions in article viii, paragraph 6(a)(ii) and (b)(ii), of the the family trust and the marital trust. the problem is compounded as discussed in respondent’s opening brief, the possibility of mis-2 the personal representative of mr. olsen’s estate but also the successor trustee of equalization of lifetime gifts to members of mr. olsen’s family; and (3) provided (2) marital trust b, and (3) the family trust. maintained; (2) eliminated the requirement in the eho trust instrument regarding [*22] dad withdrew assets from the gto trust basically for two [*17] on february 21, 2006, mr. olsen, as trustee of the gto trust, withdrew ments. we have considered all of the contentions and arguments of the estate. we taxes shall be taken into account only to the extent that it does not the source of the problem is that dad appears never to have made a 2. each share created on account of a living child of the settlor on november 3, 1994, mr. olsen created the elwood h. olsen revocable arrangements relating to life insurance proceeds not payable to this deceased grandchild shall be distributed free of this trust to the issue, mr. olsen claimed a charitable contribution deduction for the june 200417 grandchild. if such grandchild dies before attaining the age fourth, i am going to send a copy of this letter to each of my daugh- closely that it is hard to believe that he did not have this in mind. if the trustee shall distribute the principal of this trust as the settlor’s [*18] the gto trust, sent a letter (ty olsen’s september 30, 2008 letter) addressed article x - generation skipping trust, by the phrase ‘two million the trust. each share created on account of the then living issue of a - 17 - tate tax treatment and also a difference in beneficial interest between he deposited into one of his accounts. moreover, mr. olsen, as trustee of the gto we agree with respondent that the respective withdrawals totaling21 world war ii, mr. olsen received a master of laws degree from george washing- twenty-one (21) years shall be distributed to such grandchild free of - 25 - creditors of such spouse, or the estate of such spouse, or the creditors pal of this trust as the trustee determines to be advis- respondent issued a notice of deficiency (notice) with respect to mr. vided, that the trustee shall value the assets at fair market value on the grand total of the vanguard withdrawals made for gifts to have made in respect of the grace t. olsen trust (“gto trust”). [*16] and (2) fund them. nor did mr. olsen send to the beneficiaries of the gto [*20] i note that it should have been possible to reconstruct the split in support of its position that no portion of the assets of the gto trust is have been held as a separate asset in the northern trust securities [*3] sentative of the estate of mr. olsen (mr. olsen’s estate). ty olsen resided in 1040) that he filed. assets that the gto trust held on the date of mr. olsen’s death are includible in otherwise provided by the gto trust. the only exception to the foregoing nection with gifts to family members. after the withdrawals in 2004, on november 3, 1995, mr. olsen amended the terms of the eho trust in * * * * * * * determined in the notice. come tax under section 501(c) of the internal revenue code of 1986, as amended, at the time of each transfer. the power of appointment visable to provide for the health, education, support 92 years old, died testate in the state of florida. elwood ty olsen (ty olsen or grace’s trust [gto trust] to the family trust”. with respect to the estate’s alle- entitled to the income under any other trust established by which he had a qualifying income interest for life if a deduction was allowed with that was because, in ty olsen’s view as successor trustee of the gto trust, the ment explicitly authorized mr. olsen, as trustee, to distribute principal of the fam- the gto trust withdrawals pursuant to a particular provision or authority granted [*21] in making the split, i am mindful of the uncertainty as to federal estate tax purposes, provided that the credit for state death the gto trust withdrawals should be considered to have been made from the the support, health, education and maintenance of such children. the power of appointment herein granted to the settlor’s trustee during such spouse’s lifetime or by such spouse’s last will whether dad made the split himself, while he was trustee of the gto able to provide for the health, education, support and remaining in the gto trust, after the various withdrawals he made [*25] issue. but after the fight is over, the remaining assets in the clear split of the assets of the gto trust after mom’s death. there is on december 9, 1998, ms. olsen died. at the time of her death, the gto northern trust securities, together with the 3179.74 shares of the duty to minimize estate taxes for the benefit of the remainder benefi- the estate bears the burden of establishing that the determination in the day; he stated that he had gone through his files and found the two petitioner’s brief ignores these important provisions in a contorted in the gto trust instrument and (2) whether the source(s) of the gto trust as discussed infra, we agree with respondent that mr. olsen, as trustee of23 ed the principal of the marital trusts by making discretionary distributions of grandchildren of ms. olsen and mr. olsen. in that letter, ty olsen informed his on the record before us, we reject respondent’s argument that the gto trust equal shares as there are then living children of a deceased child of effort to exclude qualified terminable interest property (“qtip”) from tions and as a party of the family trust described in a the gto trust eliminated the requirement in that trust regarding equalization of 2355.88 sh fidelity lo-price stk fd 85,023.75 64,560.30 of the gto trust. ciaries. if the withdrawals are treated as having come from the mari- the gto trust, including the marital trust portions, i conclude only and (2) that the beneficiaries of the gto trust had any legally enforceable claims issue, the then remaining principal and undistributed in- 440.239 sh vanguard intl grwth 7,400.42 you, christine, and to mikey, some time in 2000. they may actually 5333.305 sh vanguard windsor ii 149,444.50 lished by this article shall not receive his or her share out- securities account between the time the account was established, in ered to have held any of the assets of the gto trust on the date of mr. olsen’s the family trust consists of all of the trust property “except that 1. until the death of the settlor’s spouse, the trustee shall, from all of the facts in this case, which the parties submitted under rule 122, following assets from the gto trust’s northern trust securities ac- the total value is accordingly about $2.7 million. the marital trust (ii) the trustee shall, in addition, pay to or apply for the includible in his estate because the [internal revenue] service respondent expands on the foregoing argument in respondent’s answering after claiming a marital deduction of $1,504,695, deductions totaling spouse during such spouse’s lifetime in periodic in- of twenty-one (21) years not having exercised such power among the arguments that the estate advances in support of its position on19 to his siblings, le olsen and christine olsen (mr. olsen’s children) but not to the assets are not subject to estate tax on dad’s death, and the beneficia- the terms of the gto trust provided in pertinent part in article viii the fol- brief as follows: deceased child of the settlor shall be further divided into as many trust b: ty olsen, le olsen, christine olsen, and the grandchildren of mr. olsen8 [*5] provisions of this trust, under the settlor’s will, by right of ment and the settlor’s spouse is expressly precluded from appointing i have reviewed what dad actually did with the assets of the gto fice it to say that the estate of ms. olsen used the unified credit in ms. olsen’s is then entitled to the income under any other trust estab- fund the family trust. $24,998 for funeral expenses and ms. olsen’s debts, and an “allowable unified findings of fact trust on that date, and that consequently the value of none of the assets that the approximately $400,000. dad cashed in the remaining gto trust gift to morningside in form 1040 that he filed. includible in mr. olsen’s estate, the estate advances various contentions and argu- power to appoint qtip to any person other than the surviving spouse. alone of the lapse of time. i conclude that i have to make the split (continued...) under the trust instrument to make a determination on the issue, rather assets, so that, in particular, all assets currently held in the northern trust. i do not plan to disclaim, but you may wish to. if you do wish applicable alternate valuation date of all of the assets that the gto trust held on shall be distributed to marital trust b. the trustee is directed as fol- now, and i am doing it by way of this letter. [*24] vanguard accounts in 2006; their value at that time was of mr. olsen’s death and that the marital trusts should be deemed to hold 71.4923 [*37] from appointing any part of the family trust for his own benefit except as decision will be entered under much of the income and principal of the trust as the trustee deter- vant to our resolution of the issue presented under section 2044 and that are based schedule m with respect to the qualified terminable interest property. issue, per stirpes, provided that an issue of the settlor who [*9] per stirpes, of such deceased grandchild. each share created on olsen the unique ability to direct charitable donations from the of the settlor shall be held or disposed of in accordance with section $1,504,695. ing a value of one million dollars ($1,000,000.00) reduced by the on november 23, 2007, mr. olsen amended the eho trust instrument in such grandchild as such grandchild shall appoint by a will at the respective times mr. olsen, as trustee of the gto trust, made the15 commissioner, t.c. memo. 1997-362, 1997 wl 438763, the estate is required to - 21 - cipal of this trust as the trustee determines to be ad- opinion trust and (2) the family trust had not been funded at the time of the gto trust benefit of the settlor’s spouse, so much of the prin- of twenty-one (21) years not having exercised such power petitioner’s brief is devoted to describing mr. olsen as nothing short maintenance of the settlor’s spouse. as morningside college: directed as follows with respect to each marital trust: frequently than annually. the estate tax marital deduction or as terminable interest property sub- [*27] 111, 115 (1933). that this case was submitted fully stipulated does not gto trust withdrawals he held certain funds in his individual name or in the name trustee with respect to property in this trust shall not be exercised - 24 - lows with respect to each marital trust: (i) the trustee shall pay the net income to the settlor’s herein granted to the settlor’s spouse is a special power of appoint- the total shown in ty olsen’s september 30, 2008 letter is incorrect.9 papers, looking for some paper trail. i found a letter from david in 1948, mr. olsen began working for morningside college as the manager after mr. olsen died, ty olsen, the personal representative of mr. olsen’s $607,927.51, which is $1,001,905.51, the stipulated value of the gto trust on the [*28] the parties agree that the respective values of any assets that marital trust everything else goes into the family trust. the requirement that the * * * * * * * informed. i propose to let you communicate with your children in have to decide whether and to what extent to fight the irs over the address in detail the principal contentions and arguments of the estate that are rele- personal representative), one of decedent’s three children, is the personal repre- made sense to withdraw the assets from the gto trust which were in personal representative, petitioner v. nielsen, the omaha attorney who drafted the gto trust, reminding ms. olsen, did not have an inter vivos power of appointment over the family throughout petitioner’s brief, petitioner describes the decedent the trustee shall pay the then remaining principal and un- beneficiaries. in addition, after mr. olsen died ty olsen, the personal represen- prohibition is found in article x, paragraph 1, of the gto trust instrument. under lege and other charitable organizations. a significant portion of a return preparer also signed ms. olsen’s estate tax return.3 assets were to be distributed as follows: (1) $1 million to marital trust a; [*38] whether, as the estate maintains, (1) mr. olsen, as the surviving spouse of discretion to distribute property in cash or in kind to this trust, pro- pursue in the light of certain actions that ty olsen, the personal representative of * * * * * * * allocable to marital trust a and marital trust b. cally provided for under this article. withdrawn from the trust, it is unnecessary to specify the division of as trustee of the gto trust, made in february 2006 and that he deposited into one point, the trustee shall distribute such income to such 3179.14 sh putnam am govt fd 28,093.35 24,538.92 child, or the estate of such child, or the creditors of the spouse shall appoint by an instrument in writing delivered to the are not includible in the value of his gross estate. however, after ms. olsen died - 4 - under i.r.c. § 2044. trust any annual accountings for that trust. to disclaim, i will be happy to prepare and to send you an appropriate is required under section 2044 to include in the value of decedent’s gross estate trust [gto trust instrument] and based on the trustee’s [mr. olsen’s] to relieve the trustee of the obligation to make the split, by reason on november 25, 2008, ty olsen, as the personal representative of dece- pal of this trust as the trustee determines to be advis-


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