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Mr. Clay, Keith Hornberger, and the Trust Distributions
Mr. Clay managed the trust assets conservatively. Other than
paying a portion of petitioner’s education and other living
expenses, he gave her a modest monthly cash allowance, which was
deposited directly into her bank account. In 1986, petitioner’s
monthly allowance was $500.
Petitioner attended college part time and worked part time as
a bank teller. On July 2, 1988, she married Keith Hornberger (Mr.
Hornberger). Following her marriage, petitioner no longer attended
school and began working full time. After the couple had children
(in 1989), petitioner ceased working outside their home. At all
relevant times, Mr. Hornberger was unemployed.
Mr. Clay periodically increased petitioner’s monthly allowance
but only after and in response to her requests.9 Mr. Clay did not
approve of petitioner’s marriage to Mr. Hornberger. Mr. Clay
believed Mr. Hornberger to be a freeloader; thus, he kept the trust
financial information from petitioner because he feared that Mr.
Hornberger and his “questionable friends” might try to “milk” the
trust through petitioner.10
9 At the time of petitioner’s marriage to Mr. Hornberger,
she asked Mr. Clay to increase her monthly allowance.
Approximately a week later, Mr. Clay agreed to do so, increasing
her monthly allowance to $1,000.
10 Mr. Clay’s concern arose from an incident in the late
1980's when the trust provided $40,000 to Mr. Hornberger in order
for him to start an automobile detailing business. The funds
(continued...)
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