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GIFTS OF AND USING LIFE INSURANCEintended to irrevocably assign the policy to the charity and to continue paymentof the insurance policy premiums.The governing state (New York) insurance law prohibited anyone, withoutan insurable interest in an insured, from obtaining an insurance policy on the lifeof another person unless the benefits are to be paid to someone with an insurableinterest. As noted, it was conceded that the charitable organization did nothave an insurable interest in the donor’s life. The intent of the donor to procurethe policy and transfer it to the charity, rather than have the charity obtain itdirectly, was seen as a circumvention of the state law prohibition.If the transaction was a violation of state law, then, upon the death of thedonor, the insurance company might not have had to pay the proceeds of thepolicy to the charity. Also, if it did, the representative of the estate might havebeen able to bring a lawsuit to recover the proceeds from the organization anddistribute them to other beneficiaries of the estate.The facts of this ruling involved, as noted, a concession that the charitableorganization lacked the requisite insurable interest in the donor. At first thought,it may appear that a charitable organization in these circumstances would benefitmore financially with an insured dead than alive—that the charity would bein a preferential position with the insurance proceeds in hand. In manyinstances, however, this is not so, and a charitable organization will have aninsurable interest in the life of a donor of a life insurance policy. For example, thedonor may be a valuable volunteer and/or a major donor in other and ongoingrespects. There should not always be an assumption that a charitable organizationthat is the owner (by gift) and beneficiary of a life insurance policy is alwaysbetter off with that donor deceased.Some states’ statutory law has been amended to invest an insurable interestin charitable organizations that are the owners and beneficiaries of donatedinsurance policies. 30 Indeed, the state involved in this ruling subsequentlyamended its law, on a retroactive basis, to provide for an insurable interest incharitable organizations with respect to donors of life insurance policies. Thereafter,the IRS revoked its ruling, noting that the individual was not proceedingwith the gift. 31A state court held that an ex-spouse had an insurable interest in the life ofthe other ex-spouse, even though the beneficiary ex-spouse also had a substantialinterest in the insured’s death. 32 This opinion is of particular applicability inconnection with the continuing uncertainty as to whether a charitable organizationcan have an insurable interest in the life of a contributor of a life insurancepolicy. In this case, the ex-wife wished to purchase insurance on the life of herex-husband, who was paying alimony to her, to continue a stream of income toher in the event of his demise. The former husband refused to cooperate, however,fearful that his former wife would soon see to his passing; he indicated thathe did not want to be “worth more dead than alive” to his former wife. She suedto force him to consent to the purchase of the insurance.30 See, e.g., Priv. Ltr. Rul. 200209020, in which the IRS noted that, under state law, a charitable donee had aninsurable interest in the life of a donor.31 Priv. Ltr Rul. 9147040.32 Hopkins v. Hopkins, 614 A.2d 96 (Md. 1992). 536