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of her gross estate through discounts for lack of marketability
and lack of control. John Rector discussed Anderson’s advice
with decedent and Frederic Rector, and decedent and her sons
decided to pursue the idea.
On September 3, 1998, John Rector met with Anderson and two
of Anderson’s colleagues to discuss forming a limited partnership
to which to transfer decedent’s assets.3 Afterwards, John Rector
met with decedent and Frederic Rector, and the three of them
discussed using a limited partnership to save Federal estate tax,
to allow decedent to give limited partner interests to her sons,
to diversify her assets, and to protect her assets from the reach
of her creditors. Decedent and her sons decided to form RLP
without any negotiation over the terms of a partnership
agreement. The three of them intended for decedent to contribute
to RLP all assets she held in the 1991 revocable trust, for no
one else to make any other contribution to RLP, for decedent to
give limited partner interests in RLP to each of her sons, and
for decedent to value the gifts at significantly less than the
proportionate value of RLP’s assets.
In order to structure the partnership and draft the
agreement (RLP agreement), John Rector met with the attorneys in
3 The parties stipulated erroneously that the meeting
occurred on Sept. 3, 1999. A stipulated exhibit establishes that
the meeting occurred on Sept. 3, 1998.
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