- 30 -
spouse. There is no evidence that O’Brien knew of the existence
of LKHP. The partnership was intended to be largely invisible.
Goldenberg testified that, during the examination of the
case, the estate did not mention that the partnership agreement
was intended as a “premarital tool”. The estate told Goldenberg
that the partnership served as an asset protection vehicle.
Goldenberg further testified that, if he had known of the
premarital reason for the partnership agreement, he would have
identified O’Brien to interview him. We are therefore not
persuaded by the testimony that LKHP was formed to provide
premarital asset protection.
Second, with respect to the estate’s claim that the
partnership was formed as a result of arm’s-length negotiations,
we are not persuaded that decedent and Hillgren acted at arm’s
length. The estate contends that Hillgren made a significant
contribution to the partnership, to wit, the services that he was
to provide to the partnership as a general partner with a
25-percent profit interest. The estate argues that decedent and
Hillgren bargained over what his profit interest would be in the
partnership. The estate claims that the negotiation between
decedent and Hillgren distinguishes this case from that of Estate
of Harper v. Commissioner, T.C. Memo. 2002-121, where the
decedent stood on both sides of the transaction. The record,
however, indicates that Hillgren was not only a general partner
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011