In Uncategorized on 09/30/2016 at 09:25

The Section 2036(a) boobytrap (“you kept it when you claim you gave it away”) blows up on Estate of Edward G. Beyer, Deceased, Craig E. Plassmeyer, Executor, 2016 T. C. Memo. 182, filed 9/29/16.

I will not attempt to digest 157 pages of Judge Chiechi’s biographical essay. The internet was down at my office yesterday, stuff didn’t get done that needed to get done, and after I got home and did it, I fell asleep at 3:00 a.m. local time while reading the opinion. Monumental quotations from formbook trust agreements with enough boilerplate to power a 120,000-ton cruise ship do not get it for me.

OK, so the late Edward G., former CFO of Abbott Labs, played fast and loose with more than a couple trusts (hi, Judge Holmes) his legal team provided for him. There were at least three plus a FLP. And Craig E., his agent (that’s someone who acts pursuant to a power of attorney, which is a piece of paper) and later ex’r, is swapping stock, promissory notes and money among various trusts and brokerage accounts. In the end, it really needed a diagram.

Craig E. is unfortunate that there are no jury trials in Tax Court. He’d get off, because no jury in this solar system could possibly have the slightest ideas of what was going on here. As it is, Judge Chiechi nails him on all counts.

The point is (and I can hear the cheers of those who have read so far, hope springing eternal in their bosoms) Craig’s lament. “In an email … from Craig Plassmeyer to Monique T, an attorney…, Craig Plassmeyer stated in pertinent part: ‘[A]ll these trusts are getting confusing. Explain to me how to record this interest payment. Which specific accounts * * * [should] show the movement of cash[?]’” 2016 T. C. Memo. 182, at p. 84. (Name omitted).

Barely halfway through this morass, and Craig E. (himself with a bachelor’s in math and chem, and later an MBA in finance, running a healthcare operation) finds his head spinning.

These labyrinthine shuck-and-jive estate plans require the ex’r to have a back office staff employed full-time to make this stuff work. Even a sophisticated ex’r with enough education and background to begin to comprehend this stuff can’t cope, if s/he must at the same time run their own business.

True, the late Edward G. left an estate north of $20 million. So it needed astute planning. But planning isn’t enough. It’s really about execution. And here the plethora of moving parts drowns poor Craig E.

I lost count of how many lawyers and brokers were involved in this case, even before trial, after I reached five. No prize for whomever finally comes up with the total.



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