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granted “all rights” stated therein. In particular, the policies
provided that the owner could change the designation of owner and
beneficiary, could surrender the policy for its cash value, and
could obtain loans against the security of the policy.
On September 7, 1995, Mrs. Burris predeceased decedent.
Following her death, the three children of decedent and Mrs.
Burris were made the beneficiaries, in equal one-third shares, of
the foregoing life insurance policies. Decedent then died on
June 18, 1996, as indicated above, and the proceeds of the
policies were presumably paid to the children.
Subsequently, on October 28, 1996, a Form 706, United States
Estate (and Generation-Skipping Transfer) Tax Return, was filed
on behalf of each spouse. On the Form 706 for Mrs. Burris’s
estate, one-half of the cash surrender value of the three life
insurance policies as of her date of death, an amount equaling
$226,070, was included as an asset in her gross estate. On the
Form 706 for decedent’s estate, the total amount of the proceeds
payable under the three policies, $825,089, was reported as
property includable in his gross estate. The estate now
contends, however, that such reporting was erroneous and that
only one-half of the proceeds, or $412,544.50, should have been
included for gross estate purposes on decedent’s return.
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Last modified: May 25, 2011