Private Split-Dollar Rulings: A New Form of Split-Dollar or Just an Extension of the Existing Rules

Brody, Lawrence; Althauser, Lucinda
February 1998
Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p38
Academic Journal
This article discusses issues on the tax consequences relating to "private" split-dollar agreement between the insured's spouse and a trust created by the insured. Under the terms of the agreement, the trust, which owned the policy, contributed the "economic benefit" cost of the agreement toward premium payments and the spouse contributed the balance. In PLR 9745019, the Internal Revenue Service reviewed a private split-dollar arrangement between a husband and wife, as the premium providers, and their irrevocable insurance trust, with respect to a policy insuring the lives of the husband and wife. Under the proposed collateral assignment split-dollar agreement, the trustee was designated as the owner of the policy, and would pay that portion of the annual policy premiums equal to the economic benefit of the arrangement.


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