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credit trust owned to the Partnership the same day. Karen, on
behalf of Mrs. Erickson, then finalized gifts to Mrs. Erickson’s
grandchildren by giving limited partnership interests in the
Partnership to three trusts for the grandchildren’s benefit (the
grandchildren’s gifts). These gifts reduced Mrs. Erickson’s
86.25-percent interest in the Partnership to only a 24.18-percent
interest.
Karen called Sigrid in Moscow on September 28 to tell her
that their mother’s health was failing. Sigrid arrived in
Minnesota from Russia on September 29, 2001. Mrs. Erickson died
the following morning.
Shortly before she died, Karen, acting as attorney-in-fact,
transferred over $2 million of Mrs. Erickson’s assets to the
Partnership and then substantially reduced Mrs. Erickson’s
partnership interest by making the grandchildren’s gifts. Most
of the retained personal assets, including the substantially
reduced retained partnership interest, were illiquid.
Operation of the Partnership and Partnership Transactions
The family continued to operate the Partnership after Mrs.
Erickson’s death. The condominiums in Florida and Colorado were
managed by the same onsite management companies both before and
after they were contributed to the Partnership. The management
companies were responsible for the day-to-day work such as
booking reservations, checking in guests, cleaning the units, and
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Last modified: November 10, 2007