Estate of Eddie L. Headrick, Cleveland Bank and Trust Company and Charles L. Almond v. Commissioner of Internal Revenue

MILBURN, Circuit Judge.

The Commissioner of Internal Revenue appeals the decision of the United States Tax Court holding that the proceeds from an insurance policy are not includable in the gross estate of the decedent, Eddie L. Headrick. For the reasons that follow, we affirm.

I

Eddie L. Headrick was a tax attorney in Cleveland, Tennessee. 1 As part of his personal estate planning, Headrick drafted an irrevocable trust agreement naming himself as the settlor. The trust agreement designated Headrick’s wife and their three minor daughters as primary beneficiaries, reserved to Headrick the right…