- 19 -
and certain other expenses. Except to the extent necessary to
fund those liabilities, decedent’s common shares had been
bequeathed to Simone. The relevant beneficiaries under the 1987
will are thus (1) decedent’s kin and (2) Simone. If we assume
that decedent’s testamentary intent was to maximize the benefit
to both groups, so long as neither group benefited at the expense
of the other, then it is consistent also to assume that decedent
had no interest in the shares being valued for estate tax
purposes at an amount greater than necessary to fund death taxes
and certain other expenses. Indeed, it is consistent to assume
that decedent had an interest in not having the shares valued at
an amount greater than necessary to satisfy those liabilities.
That is because a greater value would not benefit the kin while,
at the same time, the resulting increase in the estate tax would
only further burden the company (which was required to redeem the
shares in an amount sufficient to fund the death taxes and other
expenses) and, by the same token, reduce the value of the bequest
to Simone, who was 52 years younger than decedent.
Based on the foregoing analysis, we believe that the
inference fairly may be drawn that decedent entered into the 1987
redemption agreement for, among other purposes, a testamentary
purpose, viz, to reduce the tax on his estate. We are not
persuaded to the contrary by the fact that Simone entered into a
similar agreement. Simone received the shares subject to his
agreement pursuant to decedent’s overall plan, and Simone likely
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011