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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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