Frank and Virginia Muhich - Page 7

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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