- 4 - October 1992, when he was 73 years old, he sought financial advice from his attorney, John M. Spath. Mr. Spath suggested that decedent’s trust sell the restaurant and retail/office properties to Michael in exchange for a SCIN. The key component of the SCIN would be its provision that it would be canceled, and no more payments would be due, if decedent died before it was fully paid. Mr. Spath suggested that this arrangement would both achieve decedent’s retirement goals and minimize the amount of estate tax that would be payable on his death. Decedent accepted his attorney’s advice, and the transaction was carried out in December 1992 and January 1993. Michael executed a SCIN in the face amount of $830,000 in exchange for the two properties. The terms of the SCIN provided that Michael would repay it in monthly installments over a period of 11 years. The SCIN provided for the payment of interest at a rate which increased every 24 months. The initial interest rate was 6.25 percent, and the rate increased by one half percent at each 24- month interval, until reaching a final rate for the last 12 months of 8.75 percent. The SCIN also provided that, if decedent died before the principal and interest had been paid, it would be canceled and no more payments would be required. Michael’s obligations under the SCIN were secured by a registered mortgage on both properties. The documents effecting the transaction, including the quitclaim deeds, the mortgage andPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011