Two Approaches to Post-Connelly Insurance-Funded Buy-Sell Agreements


IN Connelly v. United States,1 The US Supreme Court unanimously ruled that life insurance proceeds paid to a corporation when a shareholder dies add to the value of the deceased shareholder's stock for estate tax purposes. The decision undermines conventional purchase and sale arrangements funded by life insurance, in which insurance proceeds are paid to a corporation to redeem a deceased shareholder's shares. Clients and their advisers will need to consider the change



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