Deborah Beers has provided analysis for BNA on the recent Tax Court case, Estate of Turner v. Comm'r. The Court held that all of the assets transferred into the FLP were includible in the decedent's gross estate because the decedent exercised a great amount of control and was effectively the sole general partner.
Regarding the life insurance question, the court noted that even though the decedent made direct payments to an insurance company, the beneficiaries still had a legal right to demand withdrawals (even without necessarily being aware of the right), and this was enough to comply with Crummey and preserve the decedent's annual gift tax exclusion.
See Deborah M. Beers, "Tax Court Rules That Assets Transferred to FLP Are Includible in Gross Estate," bna.com (Nov. 3, 2011).
See also William Alan Nelson II, "Tax Court Ruling on Crummey Withdrawal Procedures," wealthstrategiesjournal.com (Sept. 20, 2011).
Posted by Andrew Hodes, Associate Editor, Wealth Strategies Journal.
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