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in the partnership but was also cotrustee of the amended trust
and a “lender” to decedent regarding the same properties that
were transferred to the partnership. At various times, Hillgren
signed his name on documents as trustee of both the original and
amended trusts, as vice president of Sea Shell, as an officer of
Seaward, and as general partner of LKHP. As a result, Hillgren
stood on every side of the transaction. The same lawyer
represented decedent and Hillgren with respect to the formation
of the partnership. In addition, the estate provided no
corroboration of the negotiation between decedent and Hillgren
regarding Hillgren’s interest. Hillgren ignored the terms of the
partnership agreement as it suited him. Further, because the
management functions did not change and were still performed by
MSL after the formation of the partnership, it is hard to believe
that Hillgren contributed sufficient services at the formation of
the partnership to warrant his 25-percent profits interest.
(This case is further indistinguishable from Estate of Harper v.
Commissioner, supra, as discussed below because of the
commingling of funds, the “egregious” disregard for the
partnership form, and the existence of post mortem accounting
manipulations.)
2. How Formation of LKHP Failed To Alter Decedent’s
Interest
In this case, neither decedent’s interest in the properties
that were transferred to the partnership nor legal title changed
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