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person, Frederic Rector conversed with the attorneys by
telephone, and decedent corresponded with the attorneys. The
attorneys believed that they represented decedent in this
process, but neither of decedent’s sons had separate counsel as
to the formation of RLP or as to the structuring and drafting of
the RLP agreement.
6. Formation of RLP and Gifts of Partnership Interests
The RLP agreement was executed on December 17, 1998.4 Under
the terms of the agreement, decedent was a 2-percent general
partner in RLP and the 1991 revocable trust was a 98-percent
limited partner in RLP. John Rector was listed in the RLP
agreement as a 0-percent general partner, but he was not in fact
a general partner.5
The RLP agreement stated that RLP was formed
to own and manage the Property contributed by the
Partners and to conduct any other lawful business that
a limited partnership may conduct in the State of
California; to provide a centralized management
structure for all of such contributed and acquired
property; and to provide a convenient mechanism for
4 RLP was formed in California and approximately 1 year
later merged into a Nevada partnership with an identical
partnership agreement. The parties make no distinction between
the California and Nevada partnerships, and neither do we.
5 The parties have stipulated that RLP was formed and
operated as a valid, legal entity under State law. Thus, we
assume the validity of a partnership created by a single
individual as the sole general partner and her revocable trust as
the sole limited partner.
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Last modified: March 27, 2008