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of 3,611,739 shares of the above Wal-Mart stock. The fair market
value of the Wal-Mart stock on that date was $27.6875 per share,
and the consequent initial fair market value of each trust was
$100,000,023.56.
According to the provisions of each GRAT, petitioner was to
receive an annuity amount equal to 49.35 percent of the initial
trust value for the first 12-month period of the trust term and
59.22 percent of such initial value for the second 12-month
period of the trust term. In the event that petitioner’s death
intervened, the annuity amounts were to be paid to her estate.
The sums were payable on December 31 of each taxable year but
could be paid up through the date by which the Federal income tax
return for the trust was required to be filed. The payments were
to be made from income and, to the extent income was not
sufficient, from principal. Any excess income was to be added to
principal.
Upon completion of the 2-year trust term, the remaining
balance was to be distributed to the designated remainder
beneficiary. Petitioner’s daughter Ann Walton Kroenke was the
beneficiary so named under one trust instrument; petitioner’s
daughter Nancy Walton Laurie was named in the other.
Each trust was irrevocable, prohibited additional
contributions, specified that the grantor’s interest was not
subject to commutation, and mandated that no payment be made
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Last modified: May 25, 2011