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stated that she was the legal trustee of the Marital Trust and
that she was the trustee in possession of the Marital Trust
property. As a necessary part of winding up the affairs of the
Marital Trust, petitioner should have paid, or sought permission
from the State court to pay, decedent's estate's unpaid Federal
estate tax liability that resulted from the inclusion of the
Marital Trust property in decedent's gross estate.
Petitioner's contention that transferee liability under
section 6324(a)(2) cannot apply to her because she did not have
discretionary control or authority over the Marital Trust
property as of the date of decedent's death is unsupported by
both the statutory language and case law interpreting section
6324. Petitioner acknowledges that she, as trustee, had bare
legal title to the Marital Trust property. The liability
asserted against petitioner arose while she still held the assets
from which to indemnify herself. Petitioner cannot deflect the
liability imposed by section 6324(a)(2) by simply claiming that
she no longer controls the assets, having distributed them to the
beneficiary. Petitioner is not relieved from personal liability
under section 6324(a)(2) because the District Court of Dakota
County, Minnesota, ordered her to distribute the Marital Trust
property to her brother. See, e.g., King v. United States, 379
U.S. 329, 338-339 (1964) (transferee held liable despite the
distribution of property pursuant to a bankruptcy court order).
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