Economic benefit (“EB”) GSDs involve a split-dollar arrangement between a parent and his life insurance trust to fund the trust’s purchase of life insurance on the parent’s child. For wealth transfer planning purposes, EB GSDs assume that the present value of the repayment owed to the parent for premium payments is subject to a significant…
Split-dollar
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…
Case Study Series – Turbo-Charged Split-Dollar.
Topics: Estate planning, Irrevocable trusts, Split-dollar, Trusts
Private split-dollar arrangements (“SDAs”) typically involve a trust creator (“grantor”) that advances life insurance premiums on behalf of his or her irrevocable life insurance trust (“ILIT”), subject to a repayment right for such advances (the “SDA receivable”).
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…
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,…
Excluding Life Insurance Death Benefits from the Estate – Easy, Right? It Depends.
Topics: Estate planning, General life insurance, Split-dollar
Thursday, May 7, 2015WRM# 15-16 The WRMarketplace is created exclusively for AALU Members by the AALU staff and Greenberg Traurig, one of the nation’s leading tax and wealth management law firms. The WRMarketplace provides deep insight into trends and events impacting the use of life insurance products, including key take-aways, for AALU members, clients and…