Leveraging Life Insurance Premium Payments

Download or read book Leveraging Life Insurance Premium Payments written by Lawrence Brody and published by American Bar Association Section Real Property Trust & Estate Law. This book was released on 2017 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines and explains the peculiar rules for both of the premium financing regimes as well as the tax consequences and planning techniques of each. The tax and other issues affecting split-dollar arrangements grandfathered from the Final Split-Dollar Regulations are also analyzed. Split-dollar financing of life insurance premium payments is useful in any situation where one person or entity has the cash to pay the premiums and another person or entity has the need for life insurance coverage. In recent years, split-dollar arrangements have been used in a wealth transfer context, allowing the annual gift to the ILIT to be much less than the entire premium payment, because the employer, corporation or donor was entitled to recover its advances from the cash value or death benefit.