The employee's share, which, in the early years, is usually only a small percentage of the annual premium, is the measure of the employee's transfer for both gift and GST tax purposes. The employer will receive a portion of the death benefit equal to its premium outlay, and the trust will receive the remainder of the death benefit.
Cash value is split in a similar way.
Because of split-dollar's minimum gift tax cost vs. maximum estate and GST tax savings, it can be an attractive Transfer Tax Leverage Technique for large life insurance purchases. We do not express any opinion on the investment, legal, or tax consequences of this plan, and you are responsible for consulting your own investment advisors, legal counsel, and accountants for all such advice. To be placed on our current developments FAX list, Email The Weinberg Group. Inc. All Rights Reserved.