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satisfy the partnership’s obligation to his or her spouse for the
deceased partner’s share of the partnership.
Initially, the firm paid significant amounts of money to
fund the policy’s premiums. After 5 years, the firm stopped
paying the premiums and, apparently, the premiums then were paid
by borrowing from the cash value of the policy. The policy was
issued by Northwestern Mutual Life Insurance Co. (the insurance
company). The insurance policy remained in effect from 1978
until 2003. The insurance company never had any direct contact
with petitioners. Petitioners never received any distribution of
money from the policy, nor did they initiate any borrowing
against the policy.
Petitioner retired from the firm in 2001, and the firm paid
petitioner for his share of the partnership.
In a letter dated January 19, 2003, the insurance company
informed the law firm that the policy on petitioner’s life had
lapsed. The letter was addressed to “Siciliano Ellis Sheridan &
Dyer”, the name of the law firm at the time the policy was
purchased,3 and stated in pertinent part:
3 According to petitioner, the firm name was changed in 1980
when “Sheridan” withdrew from the firm to become a judge.
Petitioner also noted that “Siciliano” died in 1985, “Ellis”
retired from the firm in 1999, and petitioner retired in 2001.
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Last modified: March 27, 2008