- 34 -
decedent’s authority can be derived from the provisions of the
governing documents and the roles played by the family members
involved. Furthermore, respondent maintains that no impediments
comparable to those in United States v. Byrum, supra, existed to
constrain decedent’s powers and that the Supreme Court’s
reasoning is therefore inapplicable here. In the particular
circumstances of this case, we agree with respondent.
a. Legally enforceable rights
On these facts, decedent can properly be described as
retaining a right to designate who shall enjoy property and
income from SFLP and Stranco within the meaning of section
2036(a)(2). In this regard, it is immaterial whether we
characterize the pertinent documents and relationships as
creating rights exercisable by decedent alone, in conjunction
with other Stranco shareholders, or in conjunction with Stranco’s
president. See sec. 20.2036-1(b)(3), Estate Tax Regs.
With respect to SFLP income and as previously recounted in
greater detail, the SFLP agreement named Stranco managing general
partner and conferred on the managing general partner sole
discretion to determine distributions. The Stranco shareholders,
including decedent (through Mr. Gulig), then acted together to
delegate this authority to Mr. Gulig through the management
agreement. The effect of these actions placed decedent’s
attorney in fact in a position to make distribution decisions.
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011