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estate’s testimony. It is unnecessary, however, to prolong our
discussion of burden of proof. We decide the issues based on the
preponderance of the evidence.
Section 2036
We must decide whether the existence of LKHP will be
recognized for estate tax purposes. Respondent argues that the
value of the properties that were transferred to LKHP is
includable in decedent’s gross estate under section 2036(a). The
estate argues, however, that LKHP was a valid partnership, formed
under California law and created as a premarital asset protection
device.
Under section 2036(a), a decedent’s gross estate includes
the value of property interests transferred by the decedent
during his or her lifetime if the decedent retained for life the
possession or enjoyment of the property, or the right to the
income from the property, or the right to designate the persons
who would possess or enjoy the property or the income from the
property. The general purpose of section 2036(a) is to include
in a decedent’s gross estate transfers of property that are
“essentially testamentary in nature”. Estate of Ray v. United
States, 762 F.2d 1361, 1362 (9th Cir. 1985) (quoting United
States v. Estate of Grace, 395 U.S. 316, 320 (1969)). An asset
transferred by a decedent during his or her lifetime is included
in his or her gross estate unless he or she “absolutely,
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