Stated briefly, the effect of T. D. 5032 has thus been to revert to the original test of payment of premiums for determining when insurance has been "taken out" by the decedent, and to abandon ownership of the policy as a basis for including the proceeds in decedent's estate, thereby departing from the fundamental theory of estate taxation. Thus the regulations, in closing one door to tax avoidance, apparently open another. While this avenue of escape may be narrowed by judicial interpretation, a change in the regulations probably will be required to seal it completely.
Lloyd M. Forster,
TAXATION - FEDERAL ESTATE TAXATION OF LIFE INSURANCE EFFECT OF TREASURY DECISION 5032 AMENDING ARTICLES 25 AND 27 OF THE ESTATE TAX REGULATIONS,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol40/iss8/6