-23-
2000: $23,744 from the Merrill Lynch LRFLP
account was used to pay decedent’s living expenses.
With one exception, decedent’s daughter considered all of
these withdrawals to be loans from the LRFLP to decedent.12 As
relevant herein, none of the other partners of the LRFLP ever
received from the LRFLP a loan, a distribution, or a payment of a
personal obligation.
10. Demand Notes
Two demand notes were prepared in connection with the use of
the funds of the LRFLP to benefit decedent. The first note
(note 1) was dated December 30, 1996, and was in the stated
amount of $80,000. This amount reflected the withdrawal used to
finance the previously discussed gifts in 1997.
Under the terms of note 1, decedent (through her daughter as
decedent’s attorney-in-fact) agreed to pay the LRFLP $80,000 plus
interest at the “blended annual rate for the year as published
annually by the Commissioner”. Note 1 contained no maturity date
but was payable on demand. Note 1 stated that the LRFLP could
transfer additional funds for the benefit of decedent and that
the terms of any additional transfer would be the same as those
expressed in note 1. Neither Feldman nor the LRFLP kept
12 The single exception concerned a $16,000 withdrawal in
November 1998. For some unexplained reason, decedent’s daughter
considered only $5,745 of this amount to be a loan. Thus, while
we add the withdrawals to equal $258,844, petitioners assert that
the lent funds total $248,589 ($258,844 - ($16,000 - $5,745) =
$248,589).
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