- 15 - issue were not necessary for Jay to acquire control of Sigco. Both before and after the transfers, Jody owned 100 percent of the Minn-Kota voting stock and, therefore, controlled Minn-Kota; acquiring control of Minn-Kota for Jody was not the purpose of the transfers. A business purpose, if any, was not the primary motivation for making the reciprocal transfers at issue. It is an inescapable conclusion that decedent and his brother made the circuitous transfers for the primary purpose of increasing the number of exclusions under section 2503(b) that otherwise would have been available to them. In United States v. Estate of Grace, supra, the Supreme Court held that application of the reciprocal trust doctrine requires only that the trusts be interrelated, and requires that the arrangement, to the extent of mutual value, leave the settlors in approximately the same economic position as they would have been in had they created the trusts naming themselves as life beneficiaries. In concluding application of the reciprocal trust doctrine does not depend upon a finding that each trust was created as a quid pro quo for the other, the Supreme Court stated: We do not mean to say that the existence of "consideration," in the traditional legal sense of a bargained-for exchange, can [n]ever be relevant. In certain cases, inquiries into a settlor's reasons for creating the trusts may be helpful in establishing the requisite link between the two trusts. We only holdPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011