- 18 - existed a 57-percent complete residence with no enforceable right to insurance reimbursement and no contractual obligation between the estate or heirs and Krueger for the completion of construction. Under these circumstances no amount was includable in decedent’s gross estate to represent any possible future payment from Chubb. The situation here is unlike those where services have been performed and/or an asset exchanged and something was due to or from decedent at the time of death. See, e.g., Estate of Curry v. Commissioner, 74 T.C. 540, 545-547 (1980), where a contingent legal fee was includable in an estate based on the rationale that it had been earned and a claim existed at the time of death. Chubb’s obligation to pay is conditional and did not arise or exist until after decedent’s death. Stated another way, decedent did not have a right, at the time of her death, to receive reimbursement from Chubb until and unless the restoration was accomplished triggering Chubb’s obligation. See also Estate of Rowan v. Commissioner, 54 T.C. 633, 640 (1970), where crops had been produced, sold, and delivered prior to death so that there was a right to receive payment that was includable in that estate. Another significant reason for our holding is that the reimbursement payments, if made, had no rational relationship to the value of the completed residence or asset. Any such paymentsPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011