Estate of Ralph W. Baumgardner, Jr., Deceased, Patricia L. Baumgardner, Personal Representative, and Patricia L. Baumgardner, T. C. Memo. 2024-80, filed 8/22/24, claim the SO on their CDP didn’t cut their RCP for the cost of replacing their cars during the rest of their lives, or for rebuilding their residence during that time.

The SO did cut their RCP from $354,241 to $109,605 on remand.  T. C. Memo. 2024-80, at p. 9.

But that’s not enough for their trusty attorney, whom I’ll call JB. He wants the clients’ OIC of $1800.

Judge Alina I. (“AIM”) Marshall won’t wear it. The retained assets the SO allowed on remand are enough “to meet their substantiated and unspeculative current and future expenses.” T. C. 2024-80, at p. 19.

As for including cash surrender value of a life insurance policy in RCP, unless you can prove need to borrow on it for basic living expenses, that’s just another investment asset.

“SO C used the insurance policy’s net account value less loan and loan interest amounts to reach the net equity for purposes of the revised RCP. We note that this amount was less than each of (i) the cash surrender value of the policy or (ii) the loan amount available. Petitioners’ primary argument that the inclusion of the life insurance policy in the revised RCP was in error is that the asset was needed for future expenses and that, contrary to SO Covey’s allegation in the Supplemental Notice, it had been used to pay past expenses. The only support that we can find in the administrative record for their assertion is (i) the completed Form 433–A, which lists the insurance policy, its current cash value, and the loan balance from the policy, and (ii) a life insurance policy statement indicating the same. However, they do not point us to any other document in the administrative record that indicates what the loan proceeds were used for. Even if we assume that the loan proceeds were used to pay past basic living expenses, that by itself does not demonstrate that inclusion of the net equity from the insurance policy would cause economic hardship.” T. C. Memo. 2024-80, at p. 24. (Name omitted).

OIC-ETA tossed, levy sustained.