tigertown80
Junior Member
What is the name of your state? PA
My brother and I both owned and paid for life insurance on each other. I paid premium and owned policy on him, and vice versa. Company that we jointly owned grossed up salaries and we paid with after tax dollars.
In our shareholder agreement, we specified that life insurance should be paid to estate of deceased with note for balance.
My brother died. Prior to his death, I agreed to try to find a buyer for company rather than follow shareholder agreement and its valuation model. We suspended shareholder agreement pending outcome of negotiations with buyer. We have found a buyer and are planning to close deal. When I agreed with my brother to undertake sale of company, rather than follow our existing shareholder agreement, I told him I would keep proceeds of life insurance as his estate would not have any stock to sell me. (Note: strategic buyer willing to pay 2X what company valuation per shareholder agreement, hence my brother's estate is very interested in doing deal and NOT following shareholder agreement.)
Two questions: Does the estate have any claim to the life insurance proceeds which I have received? I paid with after tax dollars and am sole owner and beneficiary. Also, shareholder agreement is mum on what happens to life insurance if not used as part of buy sell.
Second, I have asked estate to sell me policy on my life (it is term, no cash value) for pro rata cost of premiums paid for current year. If estate refuses, do I have any way to force estate to sell?
My brother and I both owned and paid for life insurance on each other. I paid premium and owned policy on him, and vice versa. Company that we jointly owned grossed up salaries and we paid with after tax dollars.
In our shareholder agreement, we specified that life insurance should be paid to estate of deceased with note for balance.
My brother died. Prior to his death, I agreed to try to find a buyer for company rather than follow shareholder agreement and its valuation model. We suspended shareholder agreement pending outcome of negotiations with buyer. We have found a buyer and are planning to close deal. When I agreed with my brother to undertake sale of company, rather than follow our existing shareholder agreement, I told him I would keep proceeds of life insurance as his estate would not have any stock to sell me. (Note: strategic buyer willing to pay 2X what company valuation per shareholder agreement, hence my brother's estate is very interested in doing deal and NOT following shareholder agreement.)
Two questions: Does the estate have any claim to the life insurance proceeds which I have received? I paid with after tax dollars and am sole owner and beneficiary. Also, shareholder agreement is mum on what happens to life insurance if not used as part of buy sell.
Second, I have asked estate to sell me policy on my life (it is term, no cash value) for pro rata cost of premiums paid for current year. If estate refuses, do I have any way to force estate to sell?