Estate Planning Through Split Dollar Life Insurance
By: Joshua B. Glaser, Esq., LL.M. - July 25, 2017
For many high net worth individuals, life insurance is the most common way to plan for the inevitable estate tax. However, for the proceeds to be free of estate tax, the insured cannot have any “incidents of ownership” of the policy, and therefore the policy/ies are typically owned in an irrevocable trust outside of the individual’s estate. The trust, via the Trustee, will make all necessary premium payments, be named as the primary beneficiary of the policy and administer the death benefit on behalf of the insured’s intended beneficiaries.
** Disclaimer Required by IRS Circular 230** Unless otherwise expressly approved in advance by the undersigned, any discussion of federal tax matters herein is not intended and cannot be used 1) to avoid penalties under the Federal tax laws, or 2) to promote, market or recommend to another party any transaction or tax-related matter addressed.