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Jody.
Sigco Sunplant, Inc.
In 1970, decedent, George, and their mother, Dorothy, formed
Sigco Sunplant, Inc. (Sigco). Sigco is engaged in the sunflower
seed business. Upon Dorothy's demise, Sigco was owned equally by
decedent and his brother.
The Plan and the Stock Transfers
Decedent had heart disease, had undergone heart bypass
surgery, and had suffered seven heart attacks, most of them
before the transfers at issue. Decedent had seven children, his
brother has six children, and many of both men's children have
children. In discussions with their insurance agent, Dave
Middaugh (Mr. Middaugh), decedent and his brother made it clear
that they wanted their families to succeed them in the
businesses, and that they wanted decedent's family to control
Sigco and George's family to control Minn-Kota.
After many discussions, decedent, his brother, and Mr.
Middaugh devised a three-step plan to transfer divided ownership
of Sigma and Minn-Kota to each other's family and to use section
2503(b) to save estate taxes.
The first step to transfer the Sigco stock was for decedent
and his wife to make joint gifts of Sigco stock equal to $20,000
of value to their children and grandchildren during December 1994
and January 1995. The second step was for George and his wife to
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