Milton and Andrea are husband and wife and always have lived in California.At the time of Milton's prior death,he was insured in the amount of $500,000 with Andrea as the designated beneficiary.The policy was taken out by Milton before marriage and the premiums thereon were paid as follows: 20% prior to marriage from Milton's separate property and 80% after marriage from community funds.As to this policy,Milton's gross estate includes:

Question

Quizplus · Accepted Answer

Under the "tracing" approach the classification of the life insurance policy as separate or community property depends on the source of the premiums.Because 60% of the premiums were paid by Milton [20% (from separate property)+ 40% (Milton's share of the community funds)],$300,000 (60% F1F1F1S1F1F1F10 $500,000)is includible in his gross estate.

Milton and Andrea Are Husband and Wife and Always Have