Estate of Robert Wellford Lineweaver, Deceased, North Carolina Trust Company, Executor - Page 16

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          consideration in money or money's worth * * * ".  Sec.                      
          2053(c)(1)(A).                                                              
               Respondent has disallowed the estate's deduction of $100,000           
          on the ground that decedent was under no obligation on the date             
          of his death to pay Katherine such an amount.5  The estate argues           
          that decedent was obligated to provide Kathleen with at least               
          $100,000 of insurance proceeds until such time as she remarried             
          and all three children had reached age 21.  Respondent argues               
          that under the Deed of Separation, decedent was obligated to                
          maintain Kathleen as beneficiary only until she remarried.                  
          Alternatively, respondent argues that the Consent Judgment and              
          Release of All Claims executed on August 3, 1984, settled all               
          marital property rights and terminated decedent's obligation                
          under the Deed of Separation to name Kathleen as beneficiary.               
               We are faced with the task of construing the life insurance            
          provisions in the Deed of Separation in accordance with North               
          Carolina law.  The construction of a separation agreement is                
          governed, in general, by the rules and provisions applicable in             
          the case of other contracts.  Bowles v. Bowles, 237 N.C. 462,               
          465, 75 S.E.2d 413, 415 (1953).  The heart of a contract is the             
          intention of the parties which must be determined from the                  
          language of the contract, the purposes of the contract, the                 
          subject matter, and the situation of the parties at the time the            

          5 Respondent does not dispute the adequacy of consideration                 
          for the promises contained in the Deed of Separation.                       




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