Ordinarily when a donor lives for three years after the transfer, section 2035 (b) says the gift cannot be attacked as being made in contemplation of death. However, if the transferor of an insurance policy continues to pay the premiums after the transfer several questions are presented. Should each of these payments be regarded as a further gift, with the payments during the last three years considered as gifts in contemplation of death? If so, what amount would be included in the donor's estate because of the subsequent premium payments? Neither question has been answered by the courts. This paper attempts to suggest a possible solution.
Michael A. Taylor, Estate Tax Effects of Premium Payments after Transfer of Life Insurance, 13 Clev.-Marshall L. Rev. 365 (1964)