Last week the Tax Court, in a case of first impression, ruled that payments made by a decedent through a trust to pay premiums on life insurance policies obtained to fund buy-sell agreements should not be regarded as loans still owed to her estate.
The case, Estate of Morrissette v. Commissioner, 146 T.C. No. 11, is groundbreaking for the tax, wealth planning, and insurance communities because the court‘s decision opens the door to intergenerational split-dollar arrangements, thereby easing the passage of family assets such as closely held businesses through the generations with predictable estate and gift tax consequences to the original owners.
If you have any questions about a trust and how this ruling will affect you contact Neikirk, Mahoney & Smith at 502-896-2999
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