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ownership prior to an insured’s demise would cease to have any
applicability were a court called upon make such a determination
at death. The courts have stated that separate rules govern
ownership of policies and proceeds, not that distinct bodies of
law control policy ownership before versus at the time of death.
Thus, in absence of any indication to the contrary, it seems
reasonable to assume that Louisiana courts would apply a
consistent set of rules for evaluating policy ownership,
regardless of the procedural context. Since Louisiana caselaw
employs general community property principles in this task, we
cannot reject such standards in the matter before us.
We therefore conclude that the three policies of life
insurance at issue here must be presumed to be community property
under Louisiana law. As the record is devoid of facts sufficient
to rebut such presumption, we hold that in accordance with
section 20.2042-1(c)(1), (5), Estate Tax Regs., decedent
possessed incidents of ownership in only one-half of the
policies. Accordingly, only one-half of the proceeds therefrom
is includable in his gross estate, and we need not reach the
parties’ alternative contentions regarding reimbursement.
To reflect the foregoing and to give effect to concessions,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011