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Nevertheless, while not without initial appeal, the
difficulty with the foregoing theory is that it neither
adequately explains the Louisiana jurisprudence nor addresses the
interplay of its premise with the test of section 20.2042-
1(c)(1), Estate Tax Regs.
As regards State law, Louisiana courts have repeatedly
stated that ownership of policies is governed by community
property principles but ownership of proceeds is not. The
explicit distinction has always been between the type of asset
being considered (policy versus proceeds) and never between the
type of case in which the question arises. In this connection,
Berry v. Metro. Life Ins. Co., supra at 523-524, issued in the
context of a dispute over death proceeds, is illustrative. The
court in that case characterized the underlying policy as a
community asset and the former wife as owner of a one-half
interest therein. Id. At the same time, the court nonetheless
reaffirmed the rule that death benefits are outside of the
community regime and belong exclusively to the named beneficiary.
Id. The former wife was thus held to have no claim to the
proceeds payable by beneficiary designation to the decedent’s
sister. Id. at 522, 524.
Hence, although it is clear under Louisiana law that
ownership of life insurance proceeds is governed solely by
contract terms, such apparently does not prevent a spouse from
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