Thursday, June 28, 2018
In the Estate of Richard E. Cahill, et al. v. Commissioner, the Tax Court denied partial summary judgment to an estate that contested a deficiency notice in which the Internal Revenue Service adjusted the value of the decedent’s rights in three split-dollar life insurance arrangements from $183,700 to more than $9.61 million. The court declined to grant partial summary judgment on the estate’s arguments that Internal Revenue Code Sections 2036, 2038 and 2703 didn’t apply to the split-dollar arrangement and that Treasury Regulations Section 1.61-22 did apply in valuing the decedent’s interest in the split-dollar arrangements for estate tax purposes. The court’s decision will make the use of split-dollar policies less attractive as a way to shift wealth from one generation to the next and potentially may impact other estate planning vehicles.
See Justin Ransome & N. Todd Angkatavanich, Cahill Ruling Majes Split-Dolllar Arrangements Less Attractive, Wealth Management, June 26, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.