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(1) The applicants formed the trusts at the direction of their
father, Leo N. Shaw; (2) the applicants’ parents funded the
trusts over a 12-year period either by transferring assets
directly to the trusts or by transferring assets to the
applicants, who in turn transferred the assets to the trusts; and
(3) the applicants’ mother generally converted income from the
trusts to household use. Although the applicants were named as
beneficiaries of their respective trusts, income from the trusts
was not made available to the applicants until after their
parents died.
Mr. Shaw’s trust currently holds assets valued at
approximately $5.8 million, and Mrs. Sweeney’s trust currently
holds assets valued at approximately $4.2 million. The
applicants both have substantial assets in addition to their
trusts.
The applicants assert that the value of their respective
trusts should not be included in their gross estates for purposes
of computing Federal estate taxes. In particular, the applicants
maintain that their parents funded the trusts and the applicants
were merely “nominal settlors” with a life estate in the trusts.
The applicants are concerned that, after their deaths, respondent
will examine their estates’ Federal estate tax returns and
determine that the value of the trusts should be included
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Last modified: May 25, 2011