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affg. T.C. Memo. 1980-568; Vnuk v. Commissioner, 621 F.2d 1318
(8th Cir. 1980), affg. T.C. Memo. 1979-164; Wesenberg v.
Commissioner, 69 T.C. 1005 (1978). These cases involved facts
strikingly similar to the facts here.
In the cited cases, family trusts were set up using forms,
materials, and step-by-step instructions bought from promoters of
trust schemes. Generally the wife conveyed her real and personal
property to the husband. The husband then conveyed all family
property, including the family residence and vehicles, to the
trust, along with the right to receive income derived from his
lifetime services. In return, the husband received the entire
beneficial interest in the trust evidenced by beneficial interest
certificates.
Initially, the wife and a third party (usually the promoter)
were designated as trustees.9 Within a day or two, however, the
husbands also were named as trustees. The husband and wife then
became sole trustees, with the trusts to bear all their
trust-related expenses.
Shares of the beneficial interest were then divided between
the husband and wife and/or other family members. Any
disbursement of trust income would be made pro rata in accordance
with the beneficial interests as evidenced by the certificates,
9See Markosian v. Commissioner, 73 T.C. 1235, 1244 n.7
(1980), where a trustee who served only 1 month without
performing any duties was disregarded as a mere nominee.
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