Taxation - Incidents of Ownership of Life Insurance Policies: The Economic Benefits Test

Abstract

FIRST PARAGRAPH(S)|For estate tax purposes, life insurance policies on the life of a decedent payable to beneficiaries other than the decedent or his estate may be taxed as part of the decedent's gross estate. Section 2042(2) of the Internal Revenue Code provides that such policies on a decedent's life will be included in his estate if at the time of his death he possessed "any of the incidents of ownership" in the policies. In order to determine when an estate must include insurance policies on a decedent's life, it is necessary to determine what constitutes "incidents of ownership" in such policies...