- 35 -
Mrs. Gulig effectuated such decisions by executing checks to the
recipients so designated.
In addition to the rights described above related to income,
decedent also retained the right, acting in conjunction with
other Stranco shareholders, to designate who shall enjoy the
transferred SFLP property itself. The Supreme Court indicated in
United States v. Byrum, 408 U.S. at 143 n.23 (citing Commissioner
v. Estate of Holmes, 326 U.S. 480 (1946)), that a “power to
terminate the trust and thereby designate the beneficiaries at a
time selected by the settlor” would implicate section 2036(a)(2).
Pursuant to the SFLP agreement, the partnership would be
dissolved and terminated upon a unanimous vote of the limited
partners and the unanimous consent of the general partner. The
shareholders agreement likewise specifies that dissolution of
SFLP requires the affirmative vote of all Stranco shareholders.
Once dissolution and termination occur, liquidation is
accomplished as set forth in the SFLP agreement. The managing
general partner is named as the liquidator, which in turn
disburses partnership assets first in payment of debts and then
in repayment of partners’ capital account balances. Authority is
expressly granted for distributions in kind. Accordingly,
decedent can act together with other Stranco shareholders
essentially to revoke the SFLP arrangement and thereby to bring
about or accelerate present enjoyment of partnership assets.
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011