Lordi v. Lordi

The trustees of the Josephine J. Lordi Irrevocable Trust (irrevocable trust) commenced this action in the county court seeking reformation of the terms of a “split-dollar” life insurance agreement executed by Josephine J. Lordi (Mrs. Lordi) and the trustees. Pursuant to that agreement, the irrevocable trust purchased a $1,000,000 policy insuring Mrs. Lordi’s life, and substantial premiums were paid by the irrevocable trust, directly or indirectly, with funds provided to the trust by Mrs. Lordi for that purpose each year ($325,000 a year). On her Federal gift tax returns for the relevant…