Another One Bites the Dust...
In Estate of Erickson, the U.S. Tax Court finds the assets of yet another family limited partnership includable in the decedent's gross estate for estate tax purposes.
With a fact pattern strikingly similar to that of Estate of Korby, (a case I previously wrote about here) it is no wonder the U.S. Tax Court came out the same way in Estate of Erickson. In Estate of Erickson, the court recounted yet another case where the suspicious fact pattern and timing of events surrounding the creation, funding, and management of a family limited partnership led the court to conclude that the property transferred to the partnership were includable in the decedent's gross estate.
Just as in Estate of Korby, the court invoked the following three prong test to determine whether the property was properly includable in the decedent's gross estate:
1. Did the decedent make an inter vivos transfer of the property?
2. Did the decedent retain a right or interest in the transferred property that he or she did not relinquish until death?
3. Was there an absence of a bona fide sale for adequate and full consideration?
The court answered each of these three questions in the affirmative, and in doing so looked to the following factual circumstances present in the case:
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