TITLE

A Split-Dollar 'Road Map'

AUTHOR(S)
Brody, Lawrence
PUB. DATE
July 1995
SOURCE
Journal of Financial Planning;Jul95, Vol. 8 Issue 3, p105
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Splitdollar arrangements often are created or they're transfer-tax advantages, as well as their more traditional income tax advantages. However, the transfer tax advantages of split-dollar arrangements are available only if the insured does not own incidents of ownership in the policy on his or her life at death, and if no portion of the proceeds are payable to or for the benefit of the insured's estate. Under Regulation Section 20.2042-1(c)(6) control for this purpose is defined as individual ownership of more than 50% of the voting power of the corporation. An individual will be treated as owning shares with which legal title was held at the time of the owner's death by--The individual; The individual and another person jointly; The trustee of a voting trust; Any other trust of which the individual was treated as an owner under the grantor-trust rules. The issue of incidents of ownership, more so than the issue of ownership of shares, has been the key area of discussion in the controlling shareholder splitdollar context.
ACCESSION #
5556201

 

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