-24-
contemporaneous records of the amounts of the LRFLP’s funds that
were expended for decedent’s benefit.
After decedent died, decedent’s children signed a second
note (note 2). In note 2, decedent’s children (as cotrustees of
the Lillie Investment Trust) agreed to assume decedent’s
purported liability under note 1 in the amount of $292,077
(purportedly representing $258,589 in principal13 plus $33,488 in
interest accrued to decedent’s death) and to pay that amount to
the LRFLP with interest at the “blended annual rate for the year
as published annually by the Commissioner”. Note 2 was dated
July 14, 2000 (the date of decedent’s death), but was not
prepared until after that date. Note 2 contained no maturity
date but was payable on demand. Note 2 stated that the LRFLP
could transfer additional funds for the benefit of the Lillie
Investment Trust and that the terms of any additional transfer
would be the same as those expressed in note 2.
None of the funds reflected in either note 1 or note 2 were
transferred for the benefit of decedent with any expectation of
repayment from decedent or with any intent to enforce the terms
of either note against decedent. Neither general partner of the
LRFLP ever demanded from decedent any repayment of either note,
and the general partners were not concerned about receiving
13 Petitioners assert that note 2 incorrectly reflects that
$258,589 of principal was owing, rather than the $248,589
discussed supra n.12.
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