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June 6, 2024
2024-1144

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.

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

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