- 11 -
neither party could have known the ultimate results that their
respective promises would produce, since both promises depended
upon unknown future events and conditions. The nature and the
duration of the services that David was obligated to perform were
dependent upon decedent's condition and longevity. The value of
one-third of decedent's estate was dependent upon whatever
expenditures were made to meet her needs and desires during her
life and fluctuations in the value of her assets. See Estate of
Hartshorne v. Commissioner, supra at 596; Estate of Fenton v.
Commissioner, supra at 276-277. Nevertheless, decedent and David
struck their bargain. Based upon the facts presented, we find
that their mutual promises were based on adequate and full
consideration in money's worth and not intended as a substitute
for a testamentary disposition. Our conclusion is supported by
the results of the adversarial litigation between David and the
estate and their arm's-length structured settlement. See First
Natl. Bank of Amarillo v. United States, 422 F.2d at 1388.3
3In Estate of Boyce v. Commissioner, T.C. Memo. 1972-204,
affd. in part, revd. in part and remanded sub nom. Wilder v.
Commissioner, 493 F.2d 608 (2d Cir. 1974), respondent disallowed
deductions for amounts paid to decedent's attorney for legal
services rendered during decedent's life. Respondent conceded
that the deduction claimed by decedent's estate was allowable
pursuant to sec. 2053, in the event we decided in a companion
case that the decedent's attorney was required to include the
distribution from decedent's estate in gross income. In the
companion case, we found such amounts to be includable in the
income of decedent's attorney and, therefore, held that
decedent's estate was entitled to a deduction in the same amount.
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011