140.030 Taxation of contracts in contemplation of death -- Proceeds of life insurance policies -- Exemptions

140.030 Taxation of contracts in contemplation of death -- Proceeds of life

insurance policies -- Exemptions.

(1) If it appears, either from the will of the decedent or from extrinsic evidence, that an

obligation of a contractual nature exists in favor of any person payable at or after

death of the decedent, the sum so payable shall be treated for the purposes of this

chapter as a taxable transfer, unless it affirmatively appears by competent evidence

that a consideration substantially equivalent in value to the amount due under the

contract was paid or furnished by or for the other party thereto during the life of the

decedent.

(2) The proceeds payable under any life insurance policy on the death of the assured

(other than a United States government life insurance policy or national service life

insurance policy issued by or through the federal government), payable to the

assured or his estate, shall be taxable as a part of the legacy as a distributable share

of the beneficiary. The proceeds of an insurance policy payable to a designated

beneficiary, including a testamentary or inter vivos trustee, other than the assured or

his estate, shall be tax-free. The proceeds payable under any United States

government life insurance policy or national service life insurance policy issued by

or through the federal government, whether payable to a designated beneficiary or

to the assured or his estate, and any pension or annuity payments made or to be

made to the surviving spouse of an employee of a railroad or other carrier under the

Federal Railroad Retirement Act of 1935 as amended, shall be tax-free, and shall

not be considered in determining the value of any taxable transfer.