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A. Who Inherited the Agency Stock
1. Contentions of the Parties
Respondent argues that Patricia Low inherited the agency
stock. According to respondent, the language "with the
understanding that she will pay" should be interpreted in one of
two ways. Either the language subjected the bequest of agency
stock to a charge to pay her father $3,750 a month for 10 years,
or it created a condition subsequent to the bequest.
Under New Jersey law, a charge against property gives the
holder of the charge a lien against the property to ensure
payment. Olsen v. Wright, 119 N.J. Eq. 103, 108, 181 A. 182, 185
(1935). It is undisputed that decedent wanted to treat her
children equally, though she wanted Patricia Low to eventually
own the agency. Originally, the will called for $5,000-a-month
payments for 10 years ($600,000) to be made to Patricia Low's
brother. Decedent believed the agency was worth $1 million.
Decedent sold 25 percent of the agency to her daughter in 1989 on
an installment basis that required payments of $2,500 a month for
10 years ($300,000).4 Respondent argues that the math of this
arrangement is compelling; if 25 percent of the stock can be
purchased for $300,000 of payments, then $600,000 of payments
4 A loan amortization schedule was prepared by decedent's
accountant which shows that this stream of payments, when
discounted for a 10-percent annual interest rate, equates to a
beginning principal balance of $189,177.91 or $7,567.12 a share.
This value was also used in the agreement.
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