- 17 - 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.Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011