Switch Hitter! Maximizing the Flexibility of Split Dollar Life Insurance to Create Maximum Financial and Tax Leverage

Gerald Nowotny

A High-Level View of Split Dollar Life Insurance -

The planning goal of a Split Dollar Arrangement is to provide a business owner or executive with a lowcost executive benefit. From the perspective of the business owner, cost can be measured in two ways, the financial and tax cost. The financial cost relates to the out-of pocket premium expense and the tax cost to the business owner relates to the economic benefit as a result of the employer paying all or most of the policy premium. The business owner's tax cost is not measured by the amount of the premium paid by the employer, but rather the value of the economic benefit of the death protection payable to the business owner's beneficiary. The measurement of this economic benefit for tax purposes is the one-year term insurance cost for the death benefit allocated to the business owner under the Split Dollar Arrangement.

Please see full Publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Gerald Nowotny, Law Office of Gerald R. Nowotny | Attorney Advertising

Written by:

Gerald Nowotny

Law Office of Gerald R. Nowotny on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.