US Supreme Court to Settle Company-Owned Life Insurance Estate Valuation IssueUS Supreme Court to Settle Company-Owned Life Insurance Estate Valuation Issue

On Dec. 13, 2023, the U.S. Supreme Court granted certiorari in the case of Connelly v. Internal Revenue Service (although, per the United States’ brief, the correct party in this case shouldn’t be the IRS, but rather the United States), with the aim of settling a split between: (1) the U.S. Court of Appeals for the 8^th Circuit; and (2) the U.S. Courts of Appeals for the 11^th and 9^th Circuits, relating to the impact for estate tax purposes of company owned life insurance used to redeem a decedent’s interest in the company. Pursuant to the petition for certiorari, the issue to be resolved is: “whether the proceeds of a life-insurance policy taken out by a closely held corporation on a shareholder in order to facilitate the redemption of th...