Tax News Update    Email this document    Print this document  

June 6, 2024

US Supreme Court finds that life insurance proceeds earmarked for share redemption increased estate's stock value

The US Supreme Court today ruled that the value of a life insurance policy taken out for the purpose of redeeming shares in a family business operated to increase the value of those shares for estate tax purposes. In Connelly v. United States, No. 23-146 (June 6, 2024), the Supreme Court held in a unanimous opinion that the proceeds from a $3 million life insurance policy increased the value of stock held by the decedent’s estate from $3.86 million to $6.86 million and that the company’s contractual obligation to redeem the shares did not reduce the value of the stock for estate tax purposes. A Tax Alert is forthcoming.

* * * * * * * * * *
Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor