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possessing a one-half community interest in the policy at the
time of the insured’s death. Furthermore, it is only logical
that State-level decisions considering policy ownership will
typically arise in a context prior to death, such as a partition,
while cases brought after death will focus on ownership of
proceeds. In each scenario, the litigants dispute, and the State
court is concerned with deciding, only who is entitled to the
asset, either policy or proceeds, which at that juncture
represents economic value.
Against this backdrop, we emphasize that respondent’s own
regulatory test for inclusion under section 2042(2) turns on who
possesses incidents of ownership in the policy, not in the
proceeds. See sec. 20.2042-1(c)(1), Estate Tax Regs. In fact,
the purpose of section 2042(2) is to include in a decedent’s
gross estate the value of life insurance proceeds when the right
to monetary payment belongs to one other than the decedent or his
estate. Thus, the question we face here is not the one generally
addressed by the Louisiana courts in the cases regarding
ownership of proceeds after death. Rather, our inquiry is who
owned the policies at issue here under Louisiana law, a question
upon which Louisiana courts have expounded primarily in a divorce
setting.
Moreover, State jurisprudence offers no cogent basis from
which to conclude that the rules used to ascertain policy
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