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representative of decedent’s estate. At the time the petition
was filed, Mr. Bernards resided in Minnesota. On February 4,
2003, respondent issued a notice of deficiency to the estate with
respect to its timely filed Form 706, United States Estate (and
Generation-Skipping Transfer) Tax Return.
I. General Background and Time Line
Decedent was a skilled and experienced businessman. In
1966, decedent was a founding employee of Fluoroware, Inc.
(Fluoroware), a Minnesota corporation that produced packaging
materials for the semiconductor, data storage, and
microelectronic industries. In 1980, decedent left Fluoroware to
start his own corporation, Empak.
On November 9, 1984, decedent married Cynthia Bongard.
Decedent entered into this marriage with four children from a
prior marriage: Beth Akerberg, Mark Bongard, Rhonda Notermann,
and Lynn Zupan. Cynthia Bongard also entered the marriage with a
child from a previous marriage, Terra Saxe.2 Decedent and
Cynthia Bongard never had any children together, nor did decedent
adopt Terra Saxe.
On May 23, 1986, decedent formed the Wayne C. Bongard
Irrevocable Stock Accumulation Trust (ISA Trust) for the benefit
2The parties stipulated that Terra is the correct spelling,
but the Wayne C. Bongard Irrevocable Stock Accumulation Trust
Agreement spells her name Tara.
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