43.8 A Question of Ethics. Marcella Lashmett was engaged in the business of farming in Illinois. Her daughter Christine Montgomery was also a farmer. Christine often borrowed Marcella’s farm equipment. More than once, Christine used the equipment as a trade-in on the purchase of new equipment titled in Christine’s name alone. After each transaction, Christine paid Marcella an agreed-to sum of money, and Marcella filed a gift tax return. Marcella died on December 19, 1999. Her heirs included Christine and Marcella’s other daughter, Cheryl Thomas. Marcella’s will gave whatever farm equipment remained on her death to Christine. If Christine chose to sell or trade any of the items, however, the proceeds were to be split equally with Cheryl. The will designated Christine to handle the disposition of the estate, but she did nothing. Eventually, Cheryl filed a petition with an Illinois state court, which appointed her to administer the will. Cheryl then filed a suit against her sister to discover what assets their mother had owned. [In re Estate of Lashmett, 369 Ill.App.3d 1013, 874 N.E.2d 65 (4 Dist. 2007)] 1 Cheryl learned that three months before Marcella’s death, Christine had used Marcella’s tractor as a trade-in on the purchase of a new tractor. The trade-in credit had been $55,296.28. Marcella had been paid nothing, and no gift tax return had been filed. Christine claimed, among other things, that the old tractor had been a gift. What is a “gift”? What are the elements of a gift? What do the facts suggest on this claim? Discuss. 2 Christine also claimed that she had tried to pay Marcella $20,000 on the trade-in of the tractor but that her mother had refused to accept it. Christine showed a check made out to Marcella for that amount and marked “void.” Would you rule in Christine’s favor on this claim? Why or why not?