Sale of life insurance to welfare benefit plans and VEBAs

Article Abstract:

Multiple employer welfare benefit plans, or Voluntary Employees' Beneficiary Associations, can provide risk tolerant closely held business owners with income tax deductible permanent life insurance. The risk is that the deduction could be disallowed. Careful planning is required and lawyers' opinions should be solicited for the protection of taxpayers, insurance agents and companies, and any other taxpayer advisers. An extensive legal analysis is provided.

Pension, health, and welfare funds, Pension Funds & Benefit Plans, Pension Funds, Planning, Usage, Employee benefits, Retirement benefits, Voluntary employees' beneficiary associations

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Credit shelter trusts as potential purchasers of life insurance

Article Abstract:

Irrevocable inter vivos life insurance trusts can leverage transfer tax exemptions. Life insurance is a common funding vehicle in this context, but the credit shelter trust also can be used to accomplish the same task. Credit shelter trusts can show significant advantages over irrevocable trusts, partly since there is no gift tax issue associated with release of the limited power of appointment.

Life insurance, Contracts, Transfer taxes, Insurance policies

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Sale of life insurance to welfare benefit plans and VEBAs, part 2

Article Abstract:

There is some value in permitting the deductibility of contributions to a multiple employer benefit plan that pays only in case of death. The IRS has not accepted this argument. The IRS has issued a warning about these plans, and claims for such deductions have triggered audits. In Booth v. Commissioner, the US Supreme Court has supported the IRS position.

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