Are the proceeds of a life insurance policy payable to the decedent's estate included in the gross estate?

The proceeds of a life insurance policy payable to the decedent's estate are indeed included in the gross estate. This inclusion is rooted in the tax laws that govern estate tax calculations. When the beneficiary of a life insurance policy is the estate itself, the death benefit becomes part of the overall assets that are evaluated when determining the estate's total value.

When someone passes away, their gross estate includes all assets owned or controlled by the decedent at the time of their death, which encompasses all property, investments, and insurance payouts directed to the estate. The reason for this is to ensure that the full value of the estate is accounted for when the estate tax is computed. An important aspect of this is that if the policy has been established in such a way that the proceeds benefit the estate, there is a clear connection between the decedent and the benefits received, thus qualifying for inclusion in the gross estate calculation.

Other options present conditions that are not definitive in impacting the inclusion of insurance proceeds: specifying a beneficiary or the solvency of the estate does not change the fundamental principle that if the estate is the beneficiary, the life insurance proceeds must be included in the gross estate. Therefore, the presence of such proceeds directly influences the estate tax liability, reinforcing option A