Split-dollar

Generational Split Dollar – IRS Argues Inside Build Up is Retained “Income” of Decedent Triggering Estate Inclusion of Cash Value

Topics: Split-dollar

There has been significant Tax Court activity this year related to generational split dollar arrangements (GSDs), which involve split dollar arrangements between a parent and the parent’s irrevocable trust to fund the trust’s purchase of a life insurance policy typically insuring a child. At the GSD’s termination (death of the insured child or earlier agreement…

Outlook Not So Good:  Tax Court Speaks to Possible Estate Tax Treatment of Generational Split Dollar (GSD).

Topics: Estate planning, Irrevocable trusts, Split-dollar, Trusts

For the first time, two very recent Tax Court opinions (Est. of Cahill v. Commissioner and Est. of Morrissette v. Commissioner) have discussed the court’s view of the estate taxation of economic benefit GSDs. These arrangements generally involve a parent who enters into a private split-dollar agreement with a life insurance trust agreeing to pay…

What’s Trending- What Experts from the 2017 Heckerling Institute Had to Say.

Topics: Estate planning, Estate tax, Grantor trusts, Split-dollar, Trusts

The 2017 Heckerling Institute on Estate Planning identified several critical trends for legacy and life insurance planning in this uncertain environment, including (1) the need for flexibility, (2) the appealof estate freezes, like GRATs, installment sales, and preferred partnerships for current planning, (3) the tax considerations for life insurance planning regardless of any estate tax…

Tax Court Rules Again that Intergenerational Split-Dollar Arrangements are Economic Benefit Arrangements, Governed By Section 1.61-22 of the Final Split-Dollar Regulations

Topics: Estate planning, Split-dollar

In this intergenerational split dollar case, the Estate of Marion Levine filed a summary judgment motion with the Tax Court on September 15, 2015, “for the reason that the [gift tax] Notice of Deficiency was too late, and therefore, there is no deficiency owed.” The IRS argued, however, that the gift tax statute of limitations…

Case Study Series- Private Split Dollar in Action – Ensuring a Legacy.

Topics: Estate planning, Split-dollar

Private split dollar is a flexible, relatively conservative, and cost-effective tool for incorporating life insurance into a multi-purpose estate plan, which can provide family security, generate estate liquidity, and create a multi-generational legacy. It is particularly important for clients whose net worth is concentrated in illiquid assets, such as family or closely-held businesses, real estate,…

Tax Court Decides Purported Section 419(e) Plan is Both Deferred Compensation and Split-Dollar

Topics: COLI/BOLI, Estate planning, NQDC, Split-dollar

In this case, the Tax Court ruled that both the deferred compensation rules and the split-dollar life insurance regulations can apply to the same transaction in a manner that results in (1) disallowance of deductions for employer contributions and full income tax inclusion of the vested accrued benefits of highly compensated employees.

Tax Court Decides Purported Section 419(e) Plan is Both Deferred Compensation and Split-Dollar

Topics: COLI/BOLI, Estate planning, NQDC, Split-dollar

In this case, the Tax Court ruled that both the deferred compensation rules and the split-dollar life insurance regulations can apply to the same transaction in a manner that results in (1) disallowance of deductions for employer contributions and full income tax inclusion of the vested accrued benefits of highly compensated employees.