Split Dollar Life Insurance Agreement (With Irrevocable Life Insurance Trust As Policy Owner) And Collateral Assignment Of The Policy To The Employer By The Trustee (11 Pages)

Split Dollar Life Insurance Agreement (With Irrevocable Life Insurance Trust As Policy Owner) And Collateral Assignment By Trustee (11 Pages)

Included herewith are two (2) Forms:
1. A Split Dollar Agreement (With Irrevocable Life Insurance Trust As Policy Owner) and
2. The Collateral Assignment Of The Policy To The Employer By The Trustee
The purpose of the Split Dollar Agreement ("SDA") is to allow an employee to have life insurance premiums paid for his or her benefit by the employer and, upon the death, or other termination, of the employee, to allow the employer to be reimbursed for the premiums paid.
In this Split Dollar Form, the owner of the policy is an irrevocable life insurance trust created by the employee. Thus, the trustee of the trust, as the policy owner, must be a party to the SDA.
In order to protect the interests of the employer to be repaid its premium outlays, the life insurance policy is collaterally assigned to the employer as security. Thus, included is the Collateral Assignment Form To The Employer By The Trustee.

Typically, the premiums advanced by the employer are treated as "loans" to the employee for which the forgone interest is taxed as compensation to the employee, which is the assumption with this Forms. However, if they wish, the employer and employee can make other arrangements to address the compensation issues.
Irrevocable Life Insurance Trust ("ILIT") Form: If you would also like, or need, an ILIT Form, we have two (2) available, both of which are listed in this "Trusts" category:
Irrevocable Life Insurance Trust With Crummey Powers And Sample Crummey Letter: which you will see by scrolling upward or clicking this link.
Survivorship (Second-to-Die) Life Insurance Trust, which you will see by scrolling downward or clicking on this link.

Author:
Steven G. Siegel is president of The Siegel Group, a Morristown, New Jersey - based national consulting firm specializing in tax consulting, estate planning and advising family business owners and entrepreneurs.  Mr. Siegel holds a BS from Georgetown University, a JD from Harvard Law School and an LLM in Taxation from New York University.  He is the author of several books, including: Planning for An Aging Population; Business Entities: Start to Finish; Taxation of Divorce and Separation; Income Taxation of Estates and Trusts, Preparing the Audit-Proof Federal Estate Tax Return, Putting It Together: Planning Estates for $5 million and Less, Family Business Succession Planning, Business Acquisitions: Representing Buyers and Sellers in the Sale of a Business; Dynasty Trusts; Planning with Intentionally-Defective Grantor Trusts; The Federal Gift Tax: A Comprehensive Analysis; Charitable Remainder Trusts, Grantor Trust Planning: QPRTs, GRATs and SCINs, The Estate Planning Course, The Retirement Planning Course, Retirement Distributions: Estate and Tax Planning Strategies; The Estate Administration Course, Tax Strategies for Closely-Held Businesses, and Tort Litigation Settlements: Tax and Financial Issues.

Mr. Siegel has lectured extensively throughout the United States on tax, business and estate planning topics on behalf of numerous organizations, including National Law Foundation, AICPA, CCH, National Tax Institute, National Society of Accountants, and many others.  He has served as an adjunct professor of law at Seton Hall and Rutgers University law schools.

The Siegel Group provides consulting services to accountants, attorneys, financial planners and life insurance professionals to assist them with the tax, estate and business planning and compliance issues confronting their clients. Based in Morristown, New Jersey, the Group has provided services throughout the United States. The Siegel Group does not sell any products. It is an entirely fee-based organization.
Contact the Siegel Group through its president, Steven G. Siegel, e-mail: [email protected].