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Furthermore, the fact that the contemporaneous check
register labels various disbursements to the Trust a “return of
capital”, regardless of whether such are proper under the
Agreement and/or should be otherwise classified, also supports
the clear implication that Michael understood decedent’s capital
could and would be made available to him if necessary.
Additionally, Michael even liquidated an M.L. Stern & Co. money
market account and renegotiated the Marsh note in order to obtain
the requisite cash to enable the Trust to pay decedent’s estate
taxes. These facets, in turn, provide strong evidence of an
implied agreement under which decedent did not divest himself
economically of the contributed assets.
The estate also argues that the distributions to the Trust
were consistent with the guaranteed payment obligation.
Nonetheless, without regard once again to the veracity of this
allegation, we find it of little import in our analysis. The
record supports a conclusion that in making the payments Michael
was motivated by concern not with meeting HFLP’s guaranteed
payment obligation but rather with facilitating underlying
partner expenditures. Michael testified as follows on this
subject:
Q Did you regularly pay the guaranteed payments to
your father during 1994?
A Payments were made, yes.
Q Were they made regularly?
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