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Morton’s primary reason for transferring the
Portfolio to the Partnership was to create an
arrangement that would protect from Lynn’s creditors,
the assets that Lynn would receive or inherit from
Morton. * * *
* * * * * * *
Once Morton learned of the [arbitration] award and
its seriousness, he knew that he needed to address his
concerns about Lynn’s handling of her finances in a
different manner than that provided in the Trust.
Pursuant to Article V of the Trust agreement, on
Morton’s death, Lynn’ [sic] share would be distributed
to her outright. Following such distribution, Lynn
would have the responsibility to manage her assets and
Lynn’s creditors could reach them without restriction
or limitation. This was unacceptable to Morton.
* * * * * * *
Therefore, by placing Michael in charge of the
Partnership and providing by gift and on Morton’s death
that all but a fraction of Lynn’s interest would be
held as a limited partner, Morton addressed his
concerns about Lynn. Lynn’s creditors would be
inhibited due to the legal limitations of collecting a
judgment from a limited partner’s interest. [Citations
omitted.]
The emphasis of this discussion is patently post mortem as
opposed to inter vivos. Hence, not only the objective evidence
concerning HFLP’s history but also the subjective motivation
underlying the entity’s creation support an inference that the
arrangement was primarily testamentary in nature. The objective
record belies any significant predeath change, particularly from
the standpoint of economic benefit, in the partners’ relationship
to the assets. Likewise, the subjective impetus prompting
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