Archie M. Kroloff, Individually and as Beneficiary of the Estate of Dorothy Allen Kroloff, Deceased v. United States

This is a suit for refund of an estate tax in which the district court found for the plaintiff, executor and surviving husband of the decedent and hereinafter taxpayer. The government appeals, alleging, basically, only one point: the inadequacy of the evidence to support the finding.

In July 1957, taxpayer and his wife applied to the New York Life Insurance Company for insurance on the life of the wife. There were two applications and eventually two policies. One application taxpayer signed as “Applicant” and decedent as “Proposed Insured.” The other was not signed, but coneededly nothing turns on this; the policies read in like terms, and were treated alike. Upon issuance the first premiums were paid by taxpayer from community funds, the parties being residents of Arizona, a community property state. All further premiums were noticed to taxpayer and paid for by him out of community funds or through policy loans. The government takes the position that although taxpayer as an individual was the named beneficiary and sole record owner of all rights, the policies and proceeds were presumptively community property, so that an estate tax was owed on one half of the proceeds. The…