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amended, and the trust was funded with securities and cash on
March 17, 1993. The decedent received income from the securities
held in the trust. In early 1993, the decedent’s children and
the decedent met with a financial adviser and an attorney who
described for the decedent an estate plan that used family
limited partnerships. The decedent agreed to form two limited
partnerships to benefit his two children. Two new corporations
were incorporated, each serving as general partner to one of the
partnerships. The decedent received shares of stock that
represented a 49-percent ownership interest in each newly formed
corporation. Before forming the partnerships and corporations,
the decedent and his two children agreed that he would be taken
care of financially. Additionally, they wanted decedent to have
access to money in each partnership in order to continue making
gifts to his family. With respect to the adequate and full
consideration prong, the substance of the transaction revealed
that there was not a true pooling of assets. The income from
some of the properties each partner contributed was allocated to
that partner. The partnerships also failed to change the
investment strategy of their principal assets--the stocks and
bonds contributed by the decedent. The lack of nontax business
reasons for the transfer further supported the conclusion that
the decedent did not receive adequate and full consideration
within the meaning of section 2036(a). Finally, the Court
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