- 47 -
On these facts, we conclude that petitioners have failed to
prove that any economic interest passed to any other
beneficiaries. See id.; Castro v. Commissioner, supra. This
factor weighs against petitioners.
D. Restrictions Imposed by the Trusts or the Law of Trusts
The fourth factor we consider is whether the Gouveias
honored restrictions imposed by the trusts or by the law of
trusts. Markosian v. Commissioner, supra at 1244.
1. Pago Trust
The terms of the trust granted dominion and control over the
administration of the trust to Mr. Norton. However, the broad
authority granted to petitioner under the maintenance and manager
agreements imposed few, if any, restrictions on petitioner’s
management of the Pago Trust. Petitioner, rather than Mr.
Norton, made all decisions regarding the trust’s assets without
having consulted with or having sought approval from the trustee.
Moreover, petitioner had the absolute discretion to withdraw
management fees from the trust and was not restricted in any
meaningful way by the trustee or the terms of the trust.
Accordingly, we find that petitioners were not bound by any
restrictions imposed by the trust or the law of trusts. See id.;
Norton v. Commissioner, T.C. Memo. 2002-137. This factor weighs
against petitioners.
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