Estate of William G. Street, Deceased, Anne Street Skipper, Executrix - Page 12

                                       - 12 -                                         
          purposes the gross estate includes the value of all property                
          receivable by the executor as insurance under policies on the               
          life of the decedent (not on the policies themselves).                      
               In the present case, when decedent, as the owner and insured           
          of certain life insurance policies that were community property,            
          designated his estate as the beneficiary thereof, and also made             
          other transfers of property to his wife in a manner that was fair           
          to her and compensated her for the loss of insurance rights,                
          decedent was successful under Texas law in withdrawing said                 
          insurance proceeds from the regime of community property and in             
          eliminating his wife's interest therein when he died.  That being           
          so, the entire proceeds of the insurance are includable in                  
          decedent's gross estate under section 2042(1).  In this                     
          connection, it is of no help to petitioner to cite or rely on               
          section 20.2042-1(b)(2), Estate Tax Regs.1  This regulation                 
          presupposes that under controlling local law, one-half of the               
          proceeds of community property life insurance belongs to the                
          spouse and not to decedent, so that only one-half of such                   
          proceeds is includable in the taxable estate.  But as we have               
          already seen, supra, decedent's wife here was divested of her               

               1  The cited regulation provides:  "If the proceeds of an              
          insurance policy made payable to the decedent's estate are                  
          community assets under the local community property law and, as a           
          result one-half of the proceeds belongs to the decedent's spouse,           
          then only one-half of the proceeds is considered to be receivable           
          by or for the benefit of decedent's estate".                                

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011