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general partner, is a fiduciary and must act on behalf of the
Partnership and all of its partners and cannot favor any one of
them over any other of them. He cannot make distributions to one
partner without making distributions to all partners and did not
do so.” The record, on the other hand, shows a consistent
pattern of acting in response to particular needs of decedent or
his estate. We simply are unable to agree that Michael was
acting in these instances first and foremost for the good of HFLP
and not primarily as the son of his father.
Lastly, we focus on testamentary characteristics of the
partnership arrangement. According to the estate:
It is clear from the record that the organization
of the Partnership and the contribution by the Trust of
the Portfolio to the Partnership’s capital was not
“testamentary.” No part of such transaction was
intended to be effective at the time of Morton’s death.
The terms and conditions of the Partnership Agreement
and the funding of the Portfolio were complete and
unconditional and changed the relationship of the
parties to the Portfolio assets. * * *
While we acknowledge that HFLP did come into existence prior to
decedent’s death and that some change ensued in the formal
relationship of those involved to the assets, we are satisfied
that any practical effect during decedent’s life was minimal.
Rather, the partnership served primarily as an alternate vehicle
through which decedent would provide for his children at his
death.
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