TAXATION - FEDERAL ESTATE TAX - LIFE INSURANCE PAYABLE TO SPECIFIC BENEFICIARY

Authors

Roy L. Steinheimer, University of Michigan Law SchoolFollow

Abstract

Six life insurance policies were taken out by decedent upon his own life between March 19, 1925 and January 2, 1929. On July 20, 1932 the decedent, by an instrument in writing, made an assignment of the policies to his wife and named her the beneficiary under the policies. From the date of the assignment until the date of his death, the decedent did not possess any incidents of ownership of the policies though he continued to pay the premiums. The wife of the decedent sued to recover the amount of the tax, assessed and paid on the net proceeds from these policies in excess of $40,000, under§ 302 (g) of the Revenue Act of 1924. Held, that the plaintiff could not recover since the statute was broad enough to cover this situation and the tax was valid, because life insurance is inherently testamentary in character and because there is no absolute right to possession and enjoyment until insured's death. Bailey v. United States, (Ct. Cl. 1939) 27 F. Supp. 617.

Recommended Citation

Roy L. Steinheimer, TAXATION - FEDERAL ESTATE TAX - LIFE INSURANCE PAYABLE TO SPECIFIC BENEFICIARY, 38 Mich. L. Rev. 271 (1939).
Available at: https://repository.law.umich.edu/mlr/vol38/iss2/29