Estate of Lewis A. Bailey, Deceased, Frances Jeanette Foster, Executrix - Page 5




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               Attached to and made part of the grantor trust agreement               
          was an antenuptial agreement that decedent and his second wife-             
          to-be, Melba J. Bushnell (Melba), had executed in 1991 (the                 
          antenuptial agreement).  The antenuptial agreement stated that              
          decedent and Melba would each retain separate control of property           
          they had acquired before their marriage, “the same as if the                
          marriage relationship did not exist”.  The antenuptial agreement            
          identified as decedent’s separate property virtually the same               
          property (including the Lake Catherine property) that later                 
          became the corpus of the grantor trust.  In the antenuptial                 
          agreement, decedent and Melba agreed:                                       
               should either party desire to * * * sell, or otherwise                 
               convey * * * his or her separate property now owned and                
               acquired before the marriage of the parties, * * * the                 
               other hereby covenants to join in any conveyance or                    
               other instrument as may be necessary to make the                       
               transfer * * * effectual and satisfactory to any third                 
               party; provided, however, that by joining in such                      
               conveyance * * *, the party so joining pursuant to this                
               Agreement does not acquire any interest in the profits                 
               or other benefits from the transaction * * *.                          
               On December 14, 1994, decedent executed a revocation of the            
          grantor trust; on February 1, 1995, the revocation was filed.               
               Prior to the revocation of the trust, on January 31, 1994,             
          Neil and Allison Maness (the Manesses) executed a $148,700                  
          promissory note (the promissory note) in favor of the grantor               
          trust.  Exactly a year later, on January 31, 1995, decedent and             
          Melba executed a warranty deed conveying the Lake Catherine                 
          property to the Manesses.  The warranty deed recited that this              





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