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was because they wanted to retain sufficient assets to enable
them to maintain their respective accustomed standards of living.
To that end, Mr. and Ms. Stone retained certain accountants to
advise them as to what assets they should retain, and not trans-
fer, to each of the Five Partnerships. In order to formulate
such advice, those accountants performed various cashflow analy-
ses and appraisals, using different assumptions regarding the
respective life expectancies of Mr. Stone and Ms. Stone and the
anticipated returns on their respective investments. The accoun-
tants retained by Mr. Stone and Ms. Stone recommended that they
retain, and not transfer, to the Five Partnerships total assets
that would yield a monthly total cashflow of between $12,000 and
$15,000.
The Stone family intended and agreed that all the partners
of each of the Five Partnerships were to receive respective
partnership interests in each such partnership that were propor-
tionate to the fair market value of the assets that such partners
respectively transferred to such partnership. To that end,
during the period May 1996 through March 1997, before any of the
partners of each of the Five Partnerships transferred any assets
to such partnership, the process (prefunding process) of identi-
fying, describing, and obtaining various appraisals of the
respective assets of Mr. Stone and Ms. Stone took place. That
process was critical to enabling Mr. Stone, Ms. Stone, and the
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