-3-
are to be disregarded if they are not qualified interests, and
such disregard makes each annuity one for its set term of years.
We hold that the GRATs do not create annuities for their stated
term of years.
Background
1. Preface
All facts were set forth in stipulations or contained in the
exhibits submitted therewith. We find the facts accordingly.
Focardi is decedent’s surviving spouse and the personal
representative of his estate. When the petition was filed in
docket no. 3130-03, Nina M. Focardi resided in St. Petersburg,
Florida. When the petition was filed in docket No. 1892-03, the
“legal address” of decedent’s estate was in St. Petersburg,
Florida.
2. Docket No. 1892-03
On October 25, 1996, decedent transferred 817,500 shares of
stock of Great Bay Distributors, Inc. (Great Bay), into a trust
(decedent 2-year GRAT) named “Claude C. Focardi Two Year Grantor
Retained Annuity Trust”. On the same day, decedent transferred
817,500 shares of Great Bay stock into a trust (decedent 4-year
GRAT) named “Claude C. Focardi Four Year Grantor Retained Annuity
Trust”. The terms of the instruments establishing the decedent
2-year GRAT and the decedent 4-year GRAT (collectively, decedent
GRATs) were identical in all material regards except for the
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