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being discussed. Karen waited to discuss the family limited
partnership idea in detail with Sigrid because of the expense of
calling Russia to speak with her sister. Instead, Karen
suggested the idea to her sister briefly in an e-mail. When
Sigrid visited her family in Minnesota for Mrs. Erickson’s hip
replacement surgery in 2001, Sigrid and Karen met with counsel
together to talk about a family limited partnership. Karen also
discussed the concept with Mrs. Erickson, but not the financial
aspects of the transaction in any detail.
The parties signed the limited partnership agreement
creating the Partnership in May 2001. Karen acted on behalf of
her mother and herself and as co-trustee of the credit trust in
forming the Partnership. The same law firm represented all of
the parties to the limited partnership agreement although Sigrid
informally mentioned the idea to an attorney friend of hers.
Sigrid admitted that she did not understand the particulars of
the transaction. She was aware, however, that a family limited
partnership would have estate tax advantages due to valuation
discounts that apply to the partnership interests.
The limited partnership agreement provided that Karen and
Sigrid were both general partners and limited partners. Mrs.
Erickson (acting through Karen as her attorney-in-fact), Chad,
and the trustees of the credit trust (Karen and Sigrid) were
limited partners. Karen signed the limited partnership agreement
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Last modified: November 10, 2007