- 46 -
Additionally, the Surrogate’s Court decree was not a bona
fide evaluation of the rights of Jo because there was not a
“genuine and active contest” in the Surrogate’s Court--the decree
was rendered by consent. See Estate of Rapp v. Commissioner,
T.C. Memo. 1996-10; sec. 20.2056(c)-2(d)(2), Estate Tax Regs.
Bar petitioned the Surrogate’s Court for the specific purpose of
directly affecting Federal estate tax liability (Bar wanted to
reduce the amount of taxes due from the estate that were a
consequence of the 1993 will executed by decedent). See
Commissioner v. Estate of Bosch, supra at 463. Bar filed the
1998 petition and the 1998 amended petition in an attempt to
engage in postdeath “creative estate planning” and to ensure
“considerable estate tax and GST tax savings”.
Furthermore, the Surrogate’s Court decree was based on
incorrect information (i.e., that decedent intended to minimize
the estate tax and GST tax on his estate) provided by Bar.8 Had
the Surrogate’s Court heard the testimony of Mr. Newman or been
provided the letters that decedent wrote, it would have been
clear to the Surrogate’s Court that decedent’s intention was not
to minimize the estate taxes or GST taxes on his estate.
8 We make no finding regarding whether Bar intentionally
provided information he knew to be incorrect to the Surrogate’s
Court in order to obtain a result that would significantly reduce
the amount of taxes owed by the estate (and thereby increase the
amount of his inheritance). That does not change the fact,
however, that the Surrogate’s Court based its actions on
incorrect information.
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