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On May 4, 1994, the Muhichs created The Muhich Asset
Management Trust (Asset Trust). Petitioner signed the trust
declaration as the "investor", Bartoli signed as creator and
trustee, and Ms. Muhich signed as trustee. Within days, Ms.
Muhich transferred virtually all of her property to petitioner.
This property included an exhaustive list of housewares,
jewelry, electronics, china, and other personalty. In turn,
petitioner transferred virtually all of his property (which now
included Ms. Muhich's transferred property) to the Asset Trust,
including the right to receive compensation for his services.4
In exchange, Ms. Muhich and petitioner each received a CBI
representing 50 and 40 units, respectively. Within days, Bartoli
resigned as trustee, and petitioner was appointed trustee. This
left the Muhichs as sole trustees and sole beneficiaries of the
Asset Trust.
On May 7, 1994, the Asset Trust established the Muhich
Charitable Trust (Charitable Trust).5 The Asset Trust funded the
corpus with a CBI from the Asset Trust representing 10 units of
ownership. In exchange, the Asset Trust received a CBI
4 For reasons that are unclear, the Muhichs did not transfer
all of their significant property to the trust. As relevant
here, they retained title to their residence at 1106 West Dianne
and petitioner's stock in Midwest.
5 The Charitable Trust never sought nor received tax exempt
status under sec. 501(c).
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Last modified: May 25, 2011