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Creation of QTIP Trust Upon Mr. Forbes’ Death
In his will, Mr. Forbes created a QTIP trust, pursuant to
section 2056(b)(7), for decedent’s exclusive benefit. The will
directs that “the entire remainder of my estate” shall be
transferred to trustees of the QTIP trust to be held in trust for
decedent during her lifetime. The will provides that upon
Augusta Porter Forbes’ death, the remaining principal and
undistributed income of the QTIP trust shall be distributed free
of trust to Walter and Betty.
The sole trustee of the QTIP trust was American National
Bank & Trust Co. of Chattanooga (the QTIP trustee).
Distribution of Property to QTIP Trustee
As of July 31, 1986, the entire remainder of Mr. Forbes’
estate (the Forbes estate) consisted of only two assets: (1) The
42-percent interest in the limited partnership; and (2) the
assets of the sole proprietorship.
By general bill of sale dated August 1, 1986, the executors
of the Forbes estate transferred to the QTIP trustee “all of the
property owned and operated by” Mr. Forbes in the sole
proprietorship, including machinery and equipment, certain out-
buildings and other items of personal property, and “All growing
crops and timber on land owned by” the limited partnership.
By execution of another general bill of sale, also dated
August 1, 1986, the QTIP trustee conveyed to Walter and Betty,
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Last modified: May 25, 2011