US Supreme Court rules life insurance proceeds from a shareholder's death subject to estate tax in Connelly v. United States.

The US Supreme Court ruled in Connelly v. United States that life insurance proceeds received by a corporation upon a shareholder's death are subject to estate tax. The decision contradicts previous understanding that insurance proceeds do not affect the value of a deceased shareholder's gift or estate tax liability. As a result, estate planning firms, financial advisors, insurance brokers, and consultants will need to review their existing portfolios.