Split-Dollar Insurance Arrangement, Part II
Article Abstract:
The second article of two on split-dollar insurance policies contends that there is a conflict among the circuit courts regarding whether interest-free money which is payable on demand should bear gift tax consequences. Other topics discussed include: the employment related split-dollar arrangements, private plans, indirect transfers, controlling shareholders, and Employee Retirement Income Security Act (ERISA) requirements. It is relevant to note that the Tax Reform Act of 1976 excludes the contemplation of death issue from Internal Revenue Code Section 2035 and the Economic Recovery Tax Act of 1981 (ERTA). It is now possible for a controlling shareholder who holds a split-dollar life insurance policy to keep the proceeds upon the death out of his estate for estate tax purposes. As a welfare plan, a split-dollar plan is completely exempt from ERISA's participation, funding, and vesting requirements. It is usually subject to the fiduciary requirements of Part 4 of Title I of ERISA and must have a claims procedure, a written plan instrument, and a named fiduciary. Emphasis is placed on the improved advantages of split-dollar insurance plans.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1984
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Split Dollar Insurance Arrangements, Part I
Article Abstract:
The method of financing premium plans via the split dollar insurance plan is explained according to Internal Revenue Service (IRS) standards. Incentives for the use of such a program in incentive circumstances are included in analysis. Split dollar life insurance plans use whole insurance policies. This analysis features whole policies with cash dollar values. Standard splits generally have three types, which are detailed. The treatment of death proceeds is highlighted. The history of revenue rulings with regard to split dollar plans is reviewed. Variations of the plan include employer pay-all equity split dollar, and roll-out split dollar. Interest deductions on policy loans and transfer for value matters are considered.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1984
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DOL revises enforcement policy on cafeteria plans and other welfare plans with participant contributions
Article Abstract:
Cafeteria plans can have special difficulties holding participant contributions in trust, and the Department of Labor has issued Technical Release No. 88-1 stating that there would be no violations charged because of a failure to do this. ERISA Technical Release No. 92-01 regards the impact of ERISA's disclosure and reporting rules on cafeteria plans that choose not to meet trust rules according to Technical Release 88-1. This exemptive relief is permissible only in certain circumstances having to do with insurance contracts.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1992
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