November API – U.S. District Court Casts Shadow on Redemption Buy/Sell Agreements

On September 21, 2021, the U.S. District Court for the Eastern District of Missouri issued its opinion in Connelly v. United States, holding that a life insurance death benefit payable to a business for purposes of purchasing and redeeming the decedent’s stock increased the value of the business and, consequently, the decedent’s estate. The opinion is in conflict with the 2005 Eleventh Circuit decision in Estate of Blount v. Commissioner.