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express agreement that Ms. Mirowski retain an interest or a right
described in section 2036(a)(1) with respect to the respective
16-percent interests in MFV that she gave to her daughters’
trusts, respondent asserts:
Decedent was designated MFV’s General Manager at
the time of its formation, and continued to be its
General Manager until the time of her death. * * *
[MFV’s operating agreement section] 5.1.1. * * * As
General Manager, decedent had sole and exclusive au-
thority to manage MFV’s affairs. * * * [MFV’s operating
agreement section] 5.1.2. * * * Her authority included
the authority to decide the timing and amounts of
distributions from MFV. * * * [MFV’s operating agree-
ment section] 4.5.1. * * * Decedent could not be re-
moved and replaced as General Manager because, even
after the gifts to the daughters’ trusts, she still
held a majority (52%) interest. * * * [MFV’s operating
agreement section] 5.1.5. * * * Thus, when decedent
formed and funded MFV and at her death, she expressly
retained, [sic] the right to possession or enjoyment
of, or the right to the income from, the transferred
assets * * *.
The linchpin in respondent’s argument that at the time of
Ms. Mirowski’s gifts and at the time of her death Ms. Mirowski
expressly retained the right to the possession or the enjoyment
of, or the right to the income from, the respective 16-percent
interests in MFV that she gave to her daughters’ trusts is that
under section 4.5.1 of MFV’s operating agreement “Her authority
[as MFV’s general manager] included the authority to decide the
timing and amounts of distributions from MFV.” Before addressing
respondent’s contention regarding section 4.5.1 of MFV’s operat-
ing agreement, we shall describe the authority that Ms. Mirowski
had as MFV’s general manager under that agreement.
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Last modified: March 27, 2008