- 13 -
the sole initial trustee. On the same date, petitioner Mildred C.
Kerr created the Mildred Caldwell Kerr 1994 Retained Annuity Trust
under which she served as the sole initial trustee. (The above-
described trusts will hereinafter be referred to as the GRAT’s.)
The GRAT’s were structured to provide petitioners with two annuity
payments--the first payment was due December 29, 1994, and the
second payment was due December 30, 1995. The GRAT’s were each set
to terminate on the earlier of December 30, 1995, or the date of
the grantor's death.
On December 28, 1994, petitioners each executed a document
entitled “Assignment of Partnership Interest”, stating that they
were each transferring to the GRAT’s trustees a 44.535-percent
class B limited partnership interest in KFLP as more particularly
described in Schedule I thereto. The parties agree that the GRAT’s
trustees were permitted assignees within the meaning of section
8.03 of the KFLP partnership agreement. Schedule I to the
assignments states in pertinent part: “The Assigned Partnership
Interest constituted a Class B Limited Partnership Interest in
[KFLP] when owned by Assignor and, when owned by Assignee, shall
constitute a Class B Limited Partnership Interest in said
partnership.”
On December 29, 1994, and December 30, 1995, petitioners each
executed documents entitled “Assignment of Annuity” in which they
sold the rights to their annual GRAT’s annuity payments in exchange
for promissory notes from the GRAT’s. On December 29, 1994, and
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011