-49-
2. Interest on the Transfers.
Neither the transfer on August 6, 1989, nor the transfer on
September 25, 1989, was to bear interest. While it is true that
neither transfer was subject to interest, we do not consider the
absence of interest to be a significant factor in this case.
Holland's will provided that all encroachments and distributions
of trust corpus were to be interest free; thus, Jack as cotrustee
was not empowered to charge decedent interest on the transfers.
3. Security or Collateral for the Transfers.
Decedent owned a one-half undivided interest as a tenant-in-
common with her sister in a new condominium which they bought in
1988. Decedent gave a mortgage on the condominium to First
National to secure a loan for $350,000, and Jack transferred the
$100,000 at issue to her so that she could pay for improvements
to it. Although the improvements were completed prior to her
death, petitioner and respondent agreed that the fair market
value of decedent's interest in the condominium at her death was
only $300,000. Therefore, the condominium could not have secured
her debt with First National and also the $100,000 transfer from
the trust.
Furthermore, decedent's prior loans to First National, which
totaled $600,000, were paid from her share of the proceeds from
the sale of the entire Weinstock property. Thus, except for some
cash remaining from her share of the proceeds from that sale, and
some stocks and bonds, decedent had no other assets to use as
Page: Previous 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 NextLast modified: May 25, 2011