Insights & News

Circuit Split on Inclusion of Life Insurance Proceeds in Valuation of Closely Held Business Subject to Stock Redemption Agreement

November 27, 2023

In a contributed article to the Philadelphia Estate Planning Council newsletter, associate Andrew Barron breaks down the key takeaways from the U.S. Court of Appeals for the Eighth Circuit’s decision in Connelly v. United States, which created a split between the Eighth and Eleventh Circuit courts. The matter concerns whether life insurance proceeds should be included in a fair market value determination of closely held stock owned by a decedent.

“A Supreme Court opinion settling this disagreement would provide clarity to our practice,” Andrew writes. “Whichever way this shakes out, careful consideration of IRC Section 2703 and the Section 2031 Treasury regulations is crucial when drafting a buy-sell agreement of any type.”

Read the full article.

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