Estate of Marvin M. Schwan - Page 27




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                    3.3  Source of Payments.  All payments made                       
               pursuant to the provisions of paragraph 3.1 or 3.2 * *                 
               * shall be made from the assets of the Trust Estate                    
               remaining after complying with the provisions of                       
               Articles 4, 5, and 6 of this Trust Agreement and from                  
               assets of the Trust Estate otherwise disposed of under                 
               the provisions of paragraph 8.2 of Article 8 of this                   
               Trust Agreement.  If stock of Schwan’s Sales                           
               Enterprises, Inc., must be used for any payment, non-                  
               voting stock shall be used before voting stock.  * * *                 
               Given these directives, the principal difficulty with                  
          petitioners’ argument is that it conflicts with the explicit                
          language of paragraph 2.3 above.  That paragraph states that                
          “Upon the death of the Settlor, whatever then constitutes the               
          Trust Estate” (emphasis added) shall be subject to distribution             
          in accordance with the enumerated provisions.  One such provision           
          is Article 3, which governs payment of taxes and expenses.                  
          Hence, assets received after decedent’s date of death are not               
          covered by Article 3 and consequently are not among those which             
          decedent specified are to be used to pay tax and expense                    
          obligations.  Although petitioners reference an ability on the              
          part of the fiduciaries to allocate the bonus to principal under            
          the Revised Uniform Principal and Income Act, no amount of such             
          allocating can retroactively render the bonus then-existing                 
          principal.  The controlling testamentary instruments simply do              












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Last modified: May 25, 2011