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intended to encompass subsequent shareholders and conclude that
the 1981 Agreement required the consent of subsequent
shareholders (i.e., the ESOP) to any lifetime transfer of
shares.19
While we agree with the estate that a requirement of
shareholder consent to lifetime transfers may be a sufficient
restriction to render a buy-sell agreement binding during life,20
see Estate of Weil v. Commissioner, 22 T.C. at 1275, we
nevertheless do not agree that the Modified 1981 Agreement was
binding during decedent’s lifetime because decedent had the
unilateral ability to amend it.
Where a decedent had the unilateral ability to change a buy-
sell agreement while alive, the agreement will not be considered
binding during his lifetime and, therefore, cannot control value
for Federal estate tax purposes. Bommer Revocable Trust v.
Commissioner, T.C. Memo. 1997-380; see also Estate of True v.
Commissioner, T.C. Memo. 2001-167. In Bommer, the buy-sell
19 We note that this interpretation is consistent with
respondent’s assumption implicit in his alternate argument that
the consent requirement was not meaningful because decedent could
require the ESOP to give consent.
20 Respondent’s argument regarding decedent’s ability to
cause the ESOP to consent may overlook possible fiduciary
obligations of the ESOP’s trustees. Regardless, we need not
consider it further in light of our conclusion, on other grounds,
infra, that the Modified 1981 Agreement was not binding during
decedent’s lifetime.
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