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Trust) was created to receive the residue and remainder of
Holland's estate not allocated to the Marital Trust. The
trustees of the JKH Trust were authorized to encroach upon the
corpus for the benefit of decedent, and to borrow or lend money
in the execution and management of Holland's estate or
testamentary trusts. Furthermore, the will provided that all
encroachments and distributions from the trusts were to be free
of interest.
The trustees of the JKH Trust were decedent, Lewis, and
Jack. The Holland will further provided that upon the death of
decedent, the corpus and the undistributed income of the JKH
Trust were to be divided into equal shares for Lewis, Betty, and
Jack. All of the taxable income of the JKH Trust was distributed
to decedent annually during her lifetime and included in her
taxable income.
On August 6, 1989, and again on September 25, 1989, the JKH
Trust issued checks in the amount of $50,000 payable to decedent.
The checks were deposited into an account called the Carolyn W.
Holland Special Dividend Account (the Special Account). This
account was established to receive the income from investments
owned by decedent; the account was owned by decedent, but it was
controlled by Jack.
Neither of the foregoing transfers were repaid by decedent
prior to her death on November 25, 1989. On December 18, 1989,
the executors transferred $50,000 to the JKH Trust to repay the
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