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each of Joseph's three grandchildren. As the trustee of the four
trusts, Cyril had the power to vote the stock. These provisions
were as promised by Joseph to Cyril under the October 31, 1951,
agreement. Additionally, Cyril received a life interest in the
income from the Cyril Magnin Trust.
Joseph's estate tax return included the value of JM and
Specialty stock as follows:
Stock Per-Share Value
18,158 shares JM subject to option
at $1 per share $1.00
33,490 shares JM, common 1.50
21,464 shares JM, preferred .90
112-1/2 shares Specialty, common 150.00
25,000 shares Specialty, preferred .90
The IRS estate tax examiner proposed certain adjustments to
Joseph's taxable estate, including an increase in the per-share
value of JM common and preferred stock to $2.25 and $1,
respectively. The estate agreed to these changes.
On February 4, 1955, Cyril executed a Last Will and
Testament in which he bequeathed all JM and Specialty stock in
trust for the benefit of each of his three children. The will
expressly acknowledged that such provision was in performance of
the October 31, 1951, agreement between Cyril and Joseph.
Subsequently, on November 30, 1965, Cyril executed a new will
superseding his 1955 will, which also provided for the creation
of a trust of JM and Specialty stock for the benefit of his
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