Law360 recently wrote about Rutan & Tucker’s client Judith Badly a co-executor of the estate of her mother, Patricia Yoder asking the Northern District of California court on Nov. 20 to refund $3.8 million in estate tax, plus interest, arguing Yoder did not hold a “right to income” or “possession or enjoyment” from an interest on part of a commercial property company she transferred to her GRAT, but only held a right to “a fixed annuity payment payable out of transferred property.”
“A fixed-amount annuity is not the same as income,” said Rutan & Tucker Partner Paul Marx the attorney for Badgley.
Marx argued the issue was how much of the date-of-death value of the GRAT’s corpus was includable in Yoder’s gross estate for estate tax purposes and turned on the interpretation of I.R.C. § 2036(a)(1) and validity of the Internal Revenue Service’s Treas. Reg. § 20.2036-1 as applied to Yoder’s GRAT.
