- 57 -
alone or in conjunction with any person, to designate the persons
who shall possess or enjoy the property or the income therefrom.”
Section 7701(a)(1) defines “person” to include “an individual, a
trust, estate, partnership, association, company or corporation.”
A. Section 2036(a)
“An interest or right is treated as having been retained or
reserved if at the time of the transfer there was an
understanding, express or implied, that the interest or right
would later be conferred.” Sec. 20.2036-1(a), Estate Tax Regs.
“The existence of formal legal structures which prevent de jure
retention of benefits of the transferred property does not
preclude an implicit retention of such benefits.” Estate of
Thompson v. Commissioner, 382 F.3d at 375; Estate of McNichol v.
Commissioner, 265 F.2d 667, 671 (3d Cir. 1959). The existence of
an implied agreement is a question of fact that can be inferred
from the circumstances surrounding a transfer of property and the
subsequent use of the transferred property. See Estate of
Thompson v. Commissioner, supra at 376; Estate of Reichardt v.
Commissioner, 114 T.C. 144, 151 (2000).
The decedent did not need the membership interest in WCB
Holdings class B shares to continue his lifestyle. However,
decedent retained ownership of more than 91 percent of his BFLP
interest and did not make gifts of such interest prior to his
death. More importantly, decedent controlled whether BFLP could
Page: Previous 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 NextLast modified: May 25, 2011