The Tax Court held that a decedent, not his mother, was the owner of two life insurance policies on his life. In its decision, the Court relied on the record ownership of the policies. In addition, the Tax Court noted that the initial inclusion on the estate tax return of one of the policies was an admission by the administrator that the policy was an estate asset.
At the time of his death, the decedent was the record owner of three life insurance policies. The decedent's estate tax return was timely filed and included two of the three insurance policies as assets of his estate and listed the third as "(disputed ownership)." The estate later claimed that two of the insurance policies were owned by the decedent's mother and should not be included in the decedent's taxable estate. The decedent's mother paid the insurance premiums on these policies and produced cancelled checks as evidence of her payment of the premiums. She argued that the insurance company records showing the decedent as policy owner were wrong but did not produce any corroborative testimony from the agent or the insurance company.
Relying on the record ownership of the policies as the most persuasive evidence, the Court held that the decedent was the owner of the policies and the payment of premiums by his mother was gratuitous. In addition, the Court noted that the initial inclusion on the estate tax return of the policies was an admission by the administrator of the estate that the policy was an estate asset.