Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 33

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          of BCC shares.  Accordingly, we find that the 1996 Agreement did            
          not completely cover the subject matter of the 1981 Agreement, so           
          as to extinguish it.                                                        
               For the foregoing reasons, we conclude that under Georgia              
          law, the 1996 Agreement did not effect a novation of the 1981               
          Agreement, but rather a modification thereof.17  Thus, the two              
          agreements must be read together and constitute the Modified 1981           
               B.   Binding-During-Life Requirement                                   
               Before turning to the questions of whether section 2703                
          applies to the Modified 1981 Agreement and whether the agreement            
          is disregarded thereunder, we first consider whether the Modified           
          1981 Agreement satisfies the requirements of pre-section-2703 law           
          that a buy-sell agreement, to be respected for purposes of                  
          Federal estate tax value, must be binding not just at death, but            
          also during the decedent’s lifetime.  See, e.g., Estate of                  
          Matthews v. Commissioner, 3 T.C. 525 (1944); Hoffman v.                     
          Commissioner, 2 T.C. 1160, 1179 (1943), affd. sub nom. Giannini             

               17 If the 1996 Agreement were construed to be a novation of            
          the 1981 Agreement, the 1996 Agreement would not meet the                   
          binding-during-life requirement of sec. 20.2031-2(h), Estate Tax            
          Regs., because the 1996 Agreement contained no provisions                   
          restricting lifetime transfers of BCC stock.  Accordingly, it               
          would be disregarded in determining the value of decedent’s BCC             
          stock for Federal estate tax purposes.                                      

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