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January 24
Aflac ...................................... 3
www.aflac.com/critical
Benefits Selling..................IBC
www.benefitssellingexpo.com
Forethought ...................... IFC
www.fsa4life.com
Generali .............................. BC
www.generaliusalifere.com
Mass Mutual........................ 11
www.massmutual.com/
weknowbrokerage
Nationwide................... 5, 7, 9
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www.tactibrand.com/makeover
in this split-dollar plan has almost dou-
bled,” says Kroeger. “There is a strong
desire among organizations to offer their
key executives deferred comp. But be-
cause of the high compliance costs of
409A, people are increasingly looking to
other options.”
High compliance costs are not only
a concern of business owners, he adds,
but also of non-profits that (typically)
don’t have a lot of surplus cash to fund
executives’ retirement plans. Or
they’re not keen
to comply with
a separate set of
complicated IRS
rules—IRC Section
457(f )—that apply
to non-profits and
government employers.
Indeed, Crump
Life counts many non-profits among
its new-found clients for endorsement
split-dollar, which often supplement the
technique with other executive comp
plans. Example: offering a life insurance-funded executive bonus plan to long-standing key executives; and, for recently
hired execs, an endorsement plan that is
better suited to the goal of retaining
management talent for the long-term.
“With split-
dollar, it’s
crucial to
have an exit
strategy
laid out in
advance.”
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.............. www.allianzlife.com
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.......... www.deltadental.com
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Split-Dollar for Gifting
Business owners, and high net worth
individuals generally, often turn to split-dollar to make good on another objective: removing a large life insurance
policy from their estate in the most tax-efficient manner. In the case of a family-run business, for example, the owner
may wish to transition the company to
one business-savvy child; and to equalize the estate for other children by designating them beneficiaries of a policy
equal to the value of the company.
The policy proceeds can pass to the
child beneficiaries income tax-free and,
when the contract is owned by an irrevocable life insurance trust, estate tax-free.
To avoid gift tax on premiums advanced
to the trust, the business owner can set
up a “private” split-dollar plan.
The most common of these in estate
planning, market-watchers say, is the
non-equity collateral assignment (eco-
nomic benefit regime) arrangement. Lee
Slavutin, a principal of Stern Slavutin 2,
Inc., New York, says this private split-
dollar technique is most tax-efficient
when funded with a second-to-die in-
surance policy.
LifeandHealthInsuranceNews.com
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