Case: Life Insurance Proceeds Not Includible in Gross Estate Where Policies Were Validly Issued to Irrevocable Trust (T.C. Memo) (IRC §2042)

The gross estate of a deceased taxpayer did not include the value of death benefit proceeds from life insurance policies that were validly issued and freely assignable under state law, held the U.S. Tax Court in a memorandum opinion. Petitioners, the estate of Decedent and its executor, sought redetermination of a deficiency in estate tax liability for the 2016 tax year. In 2014, Decedent created an irrevocable life insurance trust that procured two life insurance policies on Decedent’s life. The policies were issued in Maryland and the trust was the sole owner and beneficiary. The premiums were initially funded by ...