Asset Protection Society

Home Capital Split Dollar

During this session you will be given a history on spilt dollar life insurance planning as well as the current state of the law and how that affects “traditional” uses of split dollar.  For those who don’t know, split dollar is not dead.

Additionally, you will learn about the very powerful Capital Split Dollar (CSD) Life Insurance program.  CSD is a “Safe Harbor” leveraged split-dollar loan arrangement under IRS Reg. §§1.264(d)(1) and 1.7872-15.  The annual contributions are 100% tax deductible to the employer and about 35% is taxable to the employee.  It provides substantial tax-free retirement and death benefits.  The equivalent pre-tax rate of return is as high as 20% (depending on actual tax brackets).

Any employee (including owners) of a “C” or “S” Corporation, partnership, LLC, and/or LLC, and/or LLP is eligible to participate.  Plan benefits can be used for retirement, estate planning, and to fund buy/sell agreements.  Finally, CSD is not subject to the company’s general creditors, offers selective participant involvement, and is not under the onerous deferred compensation regulations.