Estate of Austin Korby - Page 16

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          names or the name of their living trust only their house, a                 
          vacant lot, bank accounts with a total balance of $7,428, a 1-              
          percent interest in Crane Properties, a 2-percent interest in               
          KPLP, and the right to receive Social Security income.  KPLP paid           
          the Korbys’ home expenses after their assets were transferred to            
          it.  In order to pay the Korbys’ other basic living expenses,               
          KPLP also distributed significant percentages of its income to              
          the living trust, ranging from 26.7 percent of its income in 1996           
          to 50.1 percent of its income in 1998, which paid their remaining           
          expenses.  These payments from KPLP to the living trust totaled             
          at least 52.6 percent of the Korbys’ income in each of the 4                
          years before they died.                                                     
               The estate argues that the cash payments that KPLP made to             
          the living trust and the payments of the Korbys’ home expenses              
          were management fees paid for Austin’s services as a money                  
          manager for the KPLP assets.  The estate further claims that                
          Austin and Edna were financially able to transfer their income-             
          producing assets to KPLP because they expected the living trust             
          to receive management fees that would provide enough income to              
          them.  We do not believe that the payments to the living trust              
          were management fees.  The purported fees amounted to $19,334 to            
          $38,750 in each of the 4 years before the Korbys died.  The                 
          amounts were used by the living trust to pay Edna’s nursing home            
          costs of over $30,000 per year and the Korbys’ taxes, medical               

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Last modified: May 25, 2011