- 13 - 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.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011