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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 hold
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