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Petitioner diligently defended against the lawsuit on behalf of
the Trust.
The District Court of Caddo County, State of Oklahoma (the
trial court), dismissed the third claim for relief prior to
trial. Following a nonjury trial, the trial court sustained
petitioner's demurrer to the evidence of undue influence,
determined that the Trust was valid, enforced the no-contest
clause, and ordered Garland to return all property he had
received from the Trust. Garland appealed the trial court's
ruling to the Oklahoma Supreme Court, which affirmed the decision
of the trial court.
On her Federal income tax returns for the taxable years 1993
and 1994, petitioner deducted professional fees incurred in
connection with the lawsuit. After concessions, the fees
remaining at issue are $350 deducted on the 1993 return and
$53,014 deducted on the 1994 return.
ULTIMATE FINDINGS OF FACT
The lawsuit was brought by Garland as an heir to Mr.
Stevens’ estate and not as a beneficiary of the Trust. The
lawsuit did not allege mismanagement of the Trust but, instead,
sought to invalidate the Trust. Garland's claims in the lawsuit
and his demand of an accounting originated in his desire to gain
a larger share of Mr. Stevens’ estate than was provided under the
terms of the Trust Agreement. The lawsuit was defended by
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Last modified: May 25, 2011