TAXATION-FEDERAL ESTATE TAX-TRANSFERS OF LIFE INSURANCE IN CONTEMPLATION OF DEATH

Authors

Ralph E. Hunt S. Ed., University of Michigan Law SchoolFollow

Abstract

Insurance policies on the life of a decedent are ordinarily included in his gross estate according to the provisions of section 811 (g) of the Internal Revenue Code. Where the policy is payable to a beneficiary other than the executor, it is taxable under section 811(g)(2): (1) if the decedent paid premiums on the policy, in proportion to the amount of premiums paid by him in relation to the total premiums paid, or (2) if the decedent possessed at his death any of the incidents of ownership. However, these provisions are not exclusive; even though section 811 (g) is inapplicable, insurance policies transferred by the decedent during his lifetime may still be subject to estate tax if the transfer falls within section 811(c), as a transfer "in contemplation of death" or "intended to take effect in possession or enjoyment at or after death." At present, the interpretations of the "possession or enjoyment" clause would indicate that where the transfer is irrevocable, the transfer of insurance would not be taxable as intended to take effect in possession or enjoyment at or after death. Although it is not easy in all cases to distinguish the two clauses, our principal concern is with the contemplation of death provision.

Recommended Citation

Ralph E. Hunt S. Ed., TAXATION-FEDERAL ESTATE TAX-TRANSFERS OF LIFE INSURANCE IN CONTEMPLATION OF DEATH, 47 Mich. L. Rev. 811 (1949).
Available at: https://repository.law.umich.edu/mlr/vol47/iss6/8