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| Valuation Lessons from Connelly v. United States: The Role of Life Insurance in Estate Taxes (2102Q) |
Course CPE: 1 hour
Field(s) of Study: Taxes–1 hr
Program Level: Intermediate
Prerequisites: Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.
Advanced Preparation: None
Delivery Method: QAS Self-Study |
Item
Number: 25BV1110VLC
Shipping Weight: 0lbs. 0oz. |
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$99.00 |
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Recording Date: November 10, 2025
Presenter: Greg Caruso and Miranda Kishel
Program Description:
In June 2024, the U.S. Supreme Court issued a landmark decision in Connelly v. United States, a case that is already reshaping how valuation professionals approach estate planning, shareholder agreements, and the treatment of life insurance in business valuations. This course will provide an in-depth exploration of the Court’s ruling and its far-reaching implications for the valuation of closely held businesses.
Through the lens of the Connelly case, attendees will examine the intersection of estate tax law, corporate structuring, and valuation standards. The course will begin with a clear summary of the facts: two brothers, a life insurance-funded buy-sell agreement, and a disagreement between the estate and the IRS over whether life insurance proceeds used to fund a stock redemption should be included in the company’s fair market value.
The presentation will unpack the Supreme Court’s unanimous ruling that insurance proceeds payable to a corporation are assets; even when they are contractually earmarked for redeeming a deceased shareholder’s stock. We will discuss why the Court rejected the estate’s argument that the redemption obligation offset the insurance proceeds and explore the critical distinction between equity obligations and liabilities in the context of valuation.
Valuation practitioners will gain practical tools for identifying and avoiding valuation errors when life insurance proceeds are involved. We will also explore several post-Connelly strategies for structuring buy-sell agreements, including cross-purchase arrangements, trust-owned insurance, and defined purchase prices. Attendees will walk away with a sharper understanding of how form affects substance in estate tax valuations and how to help clients mitigate risk through proactive planning.
Whether you are a seasoned valuator or new to estate-related engagements, this course offers actionable takeaways to enhance your practice. Join us to deepen your expertise and learn how to guide clients through the complexities that arise when business value, life insurance, and estate taxes converge.
Takeaways
After completing this course, attendees will be able to confidently apply the lessons from Connelly v. United States to real-world valuation and estate planning engagements. They will understand how life insurance proceeds impact fair market value, how to properly distinguish equity obligations from liabilities, and how to identify common valuation pitfalls in buy-sell agreements. Attendees will also be equipped to recommend strategic structuring options that align with both tax compliance and client objectives. Ultimately, they will be better prepared to guide business owners and their advisors through high-stakes valuation decisions with clarity and confidence.
After completing this course, you will be able to:
- Identify the facts and legal arguments presented in Connelly v. United States, including the roles of life insurance, shareholder agreements, and estate tax valuation
- Recognize the Supreme Court’s rationale for including corporate-owned life insurance proceeds in the fair market value of a closely held business
- Differentiate between equity obligations and liabilities in the context of business valuation and estate taxation
- Determine how fair market value principles apply to valuations involving life insurance proceeds and stock redemption agreements
- Identify common valuation errors and compliance risks that may arise when structuring buy-sell agreements funded by life insurance
- Recognize the practical implications of the Connelly decision on future estate and gift tax valuation engagements
- Select alternative buy-sell agreement structures such as cross-purchase agreements and trust-owned insurance that may mitigate estate tax exposure
- Determine how to advise business owners and their advisors on the importance of proactive planning, regular valuations, and revisiting agreements in light of Connelly
For more information regarding refund or concerns, please contact our offices at (800) 677-2009.
The Consultants’ Training Institute (CTI) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
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