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signed the KPLP agreement in 1994, the first time his father
explained the partnership to him and gave him a chance to ask
questions about it was at a partnership meeting in February 1995.
Dennis’ other two brothers did not testify at trial, but the
parties stipulated that their testimony would echo Gary’s
testimony. These facts indicate that none of Austin’s and Edna’s
four sons was involved in the formation of the partnership or the
drafting of the KPLP agreement. Austin essentially stood on all
sides of the partnership’s formation and approved the provisions
of the KPLP agreement without negotiation or input from the
limited partners.
The circumstances leading us to conclude above that the
payments from KPLP to the living trust were not management fees
also weigh against a conclusion that the sale of assets to KPLP
was bona fide. The Korbys’ use of KPLP income for basic living
expenses is inconsistent with a finding of a bona fide transfer.
By drafting the KPLP agreement to allow the living trust to
determine the amounts of its purported fees as general partner
and by making Dennis, with whom Austin had an implied agreement,
his cotrustee, Austin ensured that he and Edna would be provided
with sufficient income from the KPLP assets during their
lifetimes.
The estate argues that the creation of KPLP was bona fide
because Austin and Edna created KPLP to protect the family from
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