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Edna was living in a nursing home and suffering from severe
dementia. Edna’s nursing home costs were approximately $2,500
per month. Austin had experienced a stroke and had been
diagnosed with various ongoing ailments. It is reasonable to
believe that Austin and Edna expected to incur significant
medical expenses in the future. Austin and Edna reported medical
expenses of over $37,000, approximately double their Social
Security income, in each of the 4 years before they died. It was
clear that the Korbys’ Social Security income would not cover
their basic expenses in the future. Despite their expected
increased expenses, however, Austin and Edna retained in their
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.
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