Any cases holding in our favor?


C

Corwin

Before I research the issue perhaps one of you smart fellows can help
me.

Because of the year end crunch the application just slipped past us
(my fault).

Dad (insured) is paying the premium
Son is owner (dad/client worth $30M too cheap to pay for ILIT, agent
didn't care.)

Son and daughter are 50/50 benies.

I'm looking for a case which holds on these facts there's no gift of
half the DB from the owner/son to his sister because dad actually paid
the premium and the intent from the outset was to have ILIT own the
policy.

We'll have the policy reissued properly after we've gotten credit for
the case, but in the meantime if anyone has seen a case in my favor,
I'd sleep easier.
 
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C

cal-lester

Corwin said:
Before I research the issue perhaps one of you smart fellows can help
me.

Because of the year end crunch the application just slipped past us
(my fault).

Dad (insured) is paying the premium
Son is owner (dad/client worth $30M too cheap to pay for ILIT, agent
didn't care.)

Son and daughter are 50/50 benies.

I'm looking for a case which holds on these facts there's no gift of
half the DB from the owner/son to his sister because dad actually paid
the premium and the intent from the outset was to have ILIT own the
policy.

We'll have the policy reissued properly after we've gotten credit for
the case, but in the meantime if anyone has seen a case in my favor,
I'd sleep easier.

It would appear to me, from the facts given, that DAD is making
an annual Gift Taxable "gift" to the SON ONLY, since you say
that SON is the OWNER of the contract.
There is no Income Taxable concern for EITHER Bene, since
they as Beneficiaries, hold no interest in the contract.

In the event that the Son/Owner dies PRIOR to DAD, then the
ENTIRE Cash Value of the contract (assuming permanent coverage)
would be includeable in SON's Estate Taxable Estate
Cal Lester CLU
 

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