-51-
The effect of Schutt I and II on the assets of the WTC
trusts shows that the business trusts advanced decedent’s
objectives in a meaningful way. Respondent’s argument, however,
to the extent that it takes into account the WTC assets, seeks to
counter this conclusion by once again placing unwarranted
emphasis on certain features or results of the structure to the
exclusion of others. In discussing the alleged motive for
involving the WTC trusts in the transaction, respondent states
that “even if the decedent formed the business trusts to prevent
his heirs from dissipating the family’s wealth, this is itself a
testamentary motive.” More specifically, respondent dismisses
the estate’s contentions as follows:
The decedent’s testamentary motives are
particularly evident in this case as it is clear that
he was concerned about the dissipation of the family’s
wealth after his death as opposed to during his
lifetime. While he was alive, he controlled the sale
of stock held by his revocable trust. Similarly, as
the direction or consent advisor to the bank trusts,
none of the stock held by those entities could be sold
without his consent. The only risk that assets held by
the bank trusts could be sold without his consent was
if one of his children predeceased him, thereby causing
a distribution of a portion of the trust assets to that
child’s issue. Since his surviving children were all
in good health when the business trusts were formed and
the decedent was not, there is little doubt that the
decedent was concerned about what would happen to the
family’s wealth after his death.
The Court disagrees that decedent’s motives may properly be
dismissed, in the unique circumstances of this case, as merely
testamentary. The record on the whole supports that decedent’s
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