Documents On A Disk (DOD) and Documents On The Net (DON) contains 1,053 specimen documents organized in 182 document sets.  In addition, the system contains 61 Flow Charts.  To help you locate areas of specific interest, the categories are presented below in the order in which they appear in the System.

CATEGORIES OF SPECIMEN DOCUMENTS

BUSINESS BUY-SELL PLANS:  Specimen documents and Flow Charts cover buy-sell plans for Proprietorships, Partnerships, Corporations, and Limited Liability Companies.  Included are cross-purchase, entity, and trusteed arrangements.

LIMITED LIABILITY COMPANY (LLC) OPERATING AGREEMENTS:  Specimen Operating Agreements (and related documents) are included for a general purpose LLC, a professional LLC, and a family LLC.

FAMILY LIMITED PARTNERSHIP (FLP) OPERATING AGREEMENTS: A specimen Operating Agreement (and related documents) is included for the purpose of asset protection and discount gifting.  A second specimen Operating Agreement (and related documents) is included which is designed to be an alternative to an irrevocable life insurance trust.

KEY EMPLOYEE INSURANCE PLANS:  These specimen documents and Flow Charts cover Key Employee indemnification used for a variety of circumstances.

EXECUTIVE BONUS PLANS:  These specimen documents and Flow Charts cover one of the simplest fringe benefits available -- payment of personal insurance with a bonus from an Employer.  One version allows a plan participant to have unlimited access to all cash values of the life insurance policy utilized.  A second variation, using a restrictive endorsement, allows an Employer to defer the participant’s access to cash values until retirement.

SPLIT DOLLAR PLANS:  These specimen documents and Flow Charts cover a variety of endorsement, limited collateral assignment, loan regime, and “switch” split dollar plans.

SPLIT DOLLAR UTILITY DOCUMENTS:  This section includes a variety of miscellaneous documents relating to specialized split dollar situations.

PRIVATE SPLIT DOLLAR PLANS:  These specimen documents cover circumstances in which a parent, grandparent, or other relative provide the funding for trust-owned life insurance.  Included are private limited collateral assignment, private loan regime and private “switch” dollar plans.

UNDIVIDED INTERESTS LIFE INSURANCE CO-OWNERSHIP PLANS: A conceptual cousin to split dollar.  These plans are emerging as a powerful new fringe benefit.

DEMAND NOTES:  These specimen documents cover the situation where the parties want to use the below-market-rate loan rules to govern the transaction instead of the split dollar rules.  This arrangement may be useful for older insureds where the term costs under a split dollar plan would be too high. These specimen documents can be used in the employer/employee, family member/family member, grantor/trust, and lender/borrower contexts.

TERM NOTES:  These specimen documents cover the situation where the parties want to use the below-market-rate loan rules to govern the transaction instead of the split dollar rules.  This arrangement may be useful for older insureds where the term costs under a split dollar plan would be too high. These specimen documents can be used in the employer/employee, family member/family member, grantor/trust, and lender/borrower contexts.

CORPORATE-OWNED LIFE INSURANCE (COLI) BENEFIT PLANS:  Covered in these specimen documents are salary continuation plans, deferred compensation plans, and death benefit only plans.

MULTI-LIFE PLANS:  These documents cover multi-life bonus plans, endorsement split dollar (with or without retirement-only salary continuation), loan regime collateral assignment split dollar, salary continuation, deferred compensation (with or without the 401(k) “look-a-like” feature), and death-benefit-only salary continuation.

SECTION 457(b) PLANS (2 TYPES) AND 457(f) PLANS: These documents cover deferred compensation plans for tax exempt organizations.

SEVERANCE AGREEMENTS: Deferred compensation arrangements usually involve a voluntary reduction in compensation (or foregoing a scheduled increase).  A severance agreement that allows the covered executive to recover the lost compensation is a critical companion should termination of employment occur prior to vesting of the deferred compensation plan.  Two variations are included -- one for profit-making companies and one for tax exempt firms.  The latter variation has been drafted to comply with IRC Section 457(f).

SPOUSAL WAIVER OF JOINT & SURVIVOR ANNUITY:  These are for use with Pension Maximization Plans.

OTHER PENSION DOCUMENTS:  These are for a non-spouse beneficiary; with spousal waiver.

CORPORATION HEALTH PLANS:  Covered in these specimen documents are disability wage continuation plans, medical reimbursement plans, and long-term care plans.

WEALTH TRANSFER OF IRAs AND ANNUITIES:  These four document sets provide invaluable assistance in improving wealth to heirs using both charitable and non-charitable techniques.

PRIVATE ANNUITY:  These specimen documents include a Private Annuity Agreement permitting a person to transfer property to a lower generation family member in exchange for the Transferee’s unsecured promise to pay a fixed annuity interest to the Transferor.  If the present value of the annuity interest is equal to the value of the property transferred, no gift taxes are due on the transfer.

DECLARATION REGARDING FINAL ARRANGEMENTS:  Details of this important legal document are discussed.

WILLS AND powers of attorney:  This section includes a specimen Simple Will, Pour-over Will, Will with Testamentary Trust, and a Living Will along with several specimen powers of appointment.  The Simple Will, Pour-over Will, and Will with Testamentary Trust each includes specimen language for a variety of charitable bequests that should be of special interest to those specializing in charitable estate planning.

QUALIFIED DISCLAIMER:  This specimen document follows statutory guidelines for qualified disclaimers that permit a gift or estate beneficiary the right to disclaim property received from a donor or decedent so that the property passes to another as if the disclaiming beneficiary was deceased at the time of the transfer.

IRREVOCABLE TRUSTS:  These include:

a.   A specimen irrevocable life insurance trust where trust income goes to the spouse and trust principal goes to the children after the death of the spouse. Language is included to accommodate the trust owning either a life insurance policy or a split dollar interest in a policy.

b.   A specimen irrevocable life insurance trust where both trust income and principal go to the children.  Language is included to accommodate the trust owning either a life insurance policy or a split dollar interest in a policy.

c.   A specimen irrevocable life insurance trust where both trust income and principal go to the children.  A husband and wife are assumed to be the grantors of the trust.  Language is included to accommodate the trust owning either a second-to-die life insurance policy or a split dollar interest in a second-to-die policy.

d.   A specimen irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where trust income goes to the spouse, and trust principal goes to the children after the death of the spouse.  Language is included to permit the grantor to receive loans from the trust.  Language is also included which suggests how a limited power holder provision could provide access to funds in the trust via creation of a successor trust.

e.   A specimen irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where both trust income and principal go to the children.  Language is included to permit the grantor to receive loans from the trust. Language is also included which suggests how a limited power holder could provide access to funds in the trust via creation of a successor trust.

f.    A specimen irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where both trust income and principal go to the children.  A husband and wife are assumed to be the grantors of the trust, which is designed to hold a second-to-die policy.  Language is included to permit the grantors to receive loans from the trust.  Language is also included which suggests how a limited power holder provision could provide access to funds in the trust via creation of a successor trust.

g.   A specimen generation-skipping irrevocable trust designed to hold and manage property for the benefit of the Grantor’s children and other descendants throughout their lives.  The trust includes an optional provision allowing the Grantor to pay taxes on trust income thereby eliminating additional transfer taxes on tax payments.

h.   A specimen generation-skipping irrevocable life insurance trust designed to be the owner of a life insurance policy, or a split dollar interest in a policy, that insures the life of the Grantor.  After the Grantor’s death, the policy proceeds will be paid into this generation-skipping life insurance trust, which is designed to benefit the Grantor’s children and descendants throughout their lives.

Note:  All trusts utilize Crummey withdrawal provisions to provide a gift tax exclusion under IRC Section 2503(b) up to the $5,000 or 5% lapse protection under IRC Sections 2514(e) and 2041(b)(2).

IRREVOCABLE INCENTIVE TRUSTS:  These include:

a.   A specimen incentive irrevocable life insurance trust where trust income goes to the spouse and trust principal goes to the children after the death of the spouse.  Language is included to accommodate the trust owning either a life insurance policy or a split dollar interest in a policy.

b.   A specimen incentive irrevocable life insurance trust where both trust income and principal go to the children.  Language is included to accommodate the trust owning either a life insurance policy or a split dollar interest in a policy.

c.   A specimen incentive irrevocable life insurance trust where both trust income and principal go to the children.  A husband and wife are assumed to be the grantors of the trust.  Language is included to accommodate the trust owning either a second-to-die life insurance policy or a split dollar interest in a second-to-die policy.

d.   A specimen incentive irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where trust income goes to the spouse and trust principal goes to the children after the death of the spouse.  Language is included to permit the grantor to receive loans from the trust.  Language is also included which suggests how a limited power holder provision could provide access to funds in the trust via creation of a successor trust.

e.   A specimen incentive irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where both trust income and principal go to the children.  Language is included to permit the grantor to receive loans from the trust.  Language is also included which suggests how a limited power holder could provide access to funds in the trust via creation of a successor trust.

f.    A specimen incentive irrevocable life insurance trust, called an Ultimate Life Insurance Trust or ULIT, where both trust income and principal go to the children.  A husband and wife are assumed to be the grantors of the trust, which is designed to hold a second-to-die policy.  Language is included to permit the grantors to receive loans from the trust. Language is also included which suggests how a limited power holder provision could provide access to funds in the trust via creation of a success or trust.

g.   A specimen incentive generation-skipping irrevocable trust designed to hold and manage property for the benefit of the Grantor’s children and other descendants throughout their lives.  The trust includes an optional provision allowing the Grantor to pay taxes on trust income thereby eliminating additional transfer taxes on tax payments.

h.   A specimen incentive generation-skipping irrevocable life insurance trust designed to be the owner of a life insurance policy, or a split-dollar interest in a policy, that insures the life of the Grantor.  After the Grantor’s death, the policy proceeds will be paid into this generation-skipping life insurance trust, which is designed to benefit the Grantor’s children and descendants throughout their lives.

Note:  All trusts utilize Crummey withdrawal provisions to provide a gift tax exclusion under IRC Section 2503(b) up to the $5,000 or 5% lapse protection under IRC Sections 2514(e) and 2041(b)(2).

IRREVOCABLE TOTAL RETURN UNITRUSTS: 

A Total Return Unitrust is an irrevocable trust that pays a specific percentage of the value of the trust assets to a beneficiary, such as the Grantor’s spouse, and then pays the remaining assets to the children or other heirs after the unitrust beneficiary dies.  The unitrust payment is used in lieu of an income interest. For example, a trust may be invested in equities or real estate that may yield little income but experience significant asset appreciation.  Under the traditional income approach, a spouse would be entitled to just the income; however, with a Total Return Unitrust, the spouse could be entitled to a designated percentage of the fair market value of the trust assets -- subject to a minimum guaranteed distribution in the event of under-performance.  There are eight variations as follows (the 2nd and 6th variations are what InsMark refers to as “Ultimate” Trusts):
a.   Unitrust Interest to Spouse, Principal to Children*
b.   Unitrust Interest to Spouse; WRAP Loans to Grantor; Remainder to Children*  **
c.   Unitrust Interest to Grantor’s Children and Other Descendants*
d.   Unitrust Interest to Grantor’s Children and Other Descendants***
e.   Incentive Version: Unitrust Interest to Spouse, Principal to Children*
f.    Incentive Version: WRAP Loans to Grantor; Unitrust Interest to Spouse; Remainder to Children*  **
g.   Incentive Version: Unitrust Interest to Grantor’s Children and Other Descendants*
h.   Incentive Version: Unitrust Interest to Grantor’s Children and Other Descendants***

*Funding using a life insurance policy, split dollar interest, or a loan
**Including limited power holder language authorizing successor trust(s)
***Funding from assets other than life insurance

Note:  All trusts utilize Crummey withdrawal provisions to provide a gift tax exclusion under IRC Section 2503(b) up to the $5,000 or 5% lapse protection under IRC Sections 2514(e) and 2041(b)(2).

CRUMMEY WITHDRAWAL POWER NOTIFICATIONS:  These include:

a.   Grantor’s Notification to Trustee Concerning Existence of Withdrawal Rights.
b.   Initial Notification to Beneficiary Concerning Existence of Withdrawal Rights.
c.   Notification to Beneficiary of Withdrawal Rights Concerning a Current Gift.
d.   Notification to Beneficiary of Withdrawal Rights Concerning Recurring Indirect or Deemed Gifts.
e.   Notification to Beneficiary of Withdrawal Rights Concerning Recurring Direct Gifts.

SECTION 6166 INSTALLMENT PAYMENT OF ESTATE TAX:  This section includes documents relating to the deferral of estate taxes under IRC Section 6166 for certain estates that include a closely-held business.

REVOCABLE TRUSTS:  These include:

a.   Revocable Trust (for Benefit of Grantor and Remainder to Children)
b.   Revocable Credit Shelter Trust (for Benefit of Grantor, Grantor’s Spouse, and Remainder to Children)
c.   Revocable Credit Shelter Trust with Qualified Domestic Trust Provision (QDOT)

OTHER TRUSTS: 

a.   A grantor retained annuity trust (GRAT) permitting the grantor to give property to a family member or other donee at a discount for gift tax purposes.  The donor retains an income interest equal to a fixed percentage of the property as valued at the time of the transfer for a period of years.  The value of the donee’s remainder interest for gift tax purposes is derived by actuarially reducing the value of the property transferred by the present value of the donor’s income interest.

b.   A grantor retained unitrust (GRUT) permitting the grantor to give property to a family member or other donee at a discount for gift tax purposes.  The donor retains an income interest equal to a fixed percentage of the property as valued each year for a period of years.  The value of the donee’s remainder interest for gift tax purposes is derived by actuarially reducing the value of the property transferred by the present value of the donor’s income interest.

c.   A qualified personal residence trust permitting the Grantor to live in his or her residence for a period of years, while transferring the residence to the next generation at a discount for estate and gift tax purposes if the Grantor lives for the full term of his/her interest in the trust.  The sample document complies with Proposed Regulation Section 25.2702-5(c)(9), which applies to trusts created after May 16, 1996. 

d.   A trust document permitting the Grantor to lease the residence that the Grantor has transferred to a qualified personal residence trust for the benefit of Grantor’s children after the Grantor’s interest in the trust has terminated.

e.   A specimen Rabbi Trust, i.e., an irrevocable grantor trust funded with employer assets that have been set aside to support unfunded deferred compensation obligations. The trust utilizes the suggested language of Revenue Procedures 92-64 and 92-65 and includes several additional provisions designed to protect interests of both the employer and executives.

f.    A revocable credit shelter trust with a qualified domestic trust (QDOT) provision.  In general, the marital deduction is not available to surviving non-citizen spouses; however, the sample document includes the necessary provisions for such a spouse to qualify.

g.   An irrevocable trust designed to meet the needs of a handicapped or disabled child or other family member.  This trust is often called a special needs trust, which instructs the trustee to make use of all resources available from governmental and private relief agencies before using trust assets.  It also denies the trustee any powers that would cause the trustee beneficiary to become ineligible for governmental assistance.

CLIENT LETTERS:  These include explanations of and documents for an: Attorney Engagement Letter, a Broker of Record Letter, and an Adviser Authorization Letter      

INDIVIDUAL HEALTH SAVINGS ACCOUNTS: These popular arrangements are examined in detail.

CHARITABLE GIFTS:  These include:

a.   Charitable Gift Annuity (Joint Life Deferred)
b.   Charitable Gift Annuity (Joint Life Immediate)
c.   Charitable Gift Annuity (Single Life Deferred)
d.   Charitable Gift Annuity (Single Life Immediate)
e.   Inter Vivos Charitable Remainder Gift of Personal Residence or Farm

CHARITABLE TRUSTS: 

a.   Inter Vivos and testamentary charitable remainder trusts, both of the annuity trust and unitrust varieties.  These split-interest trusts provide the donor a charitable income tax deduction equal to the present value of the remainder interest that will go to charity after the donor’s death or a term of years.  The donor retains an income interest equal to a fixed percentage of the property as valued at the time of the transfer in the case of a charitable remainder annuity trust (CRAT) or a fixed percentage of the property as valued each year in the case of a charitable remainder unitrust (CRUT).

b.   Charitable lead trusts, both of the annuity trust and unitrust varieties.  These split-interest trusts provide the donor a charitable income tax deduction equal to the present value of a stream of income that will go to charity during the term of the trust.  The charity’s income interest is equal to a fixed percentage of the property as valued at the time of the transfer in the case of a charitable lead annuity trust (CLAT) or a fixed percentage of the property as valued each year in the case of a charitable lead unitrust (CLUT).  The donor or members of the donor’s family receive the property at the end of the trust term.

IRS CIRCULAR 230 DISCLOSURE: A special set of documents (Highlights, Technical Preface, Client Letter, and Specimen Disclosure Language) is included.

SPECIAL DOCUMENTS: This section includes the following documents:
a.   Analysis of the Marketing Impact of the Final Split Dollar Regulations on Split Dollar Plans
b.   Section 7872 Benefit Plans (Loan and Loan Interest Logic)
c.   Plan Features of the InsMark Loan-Based Split Dollar System
d.   Plan Features of the InsMark Loan-Based Deferred Compensation Plan System
e.   Section 11(d) of the Securities Exchange Act of 1934
f.    IRS Table 2001 Rates
g.   Insured/Grantor Access to Funds in an Irrevocable Life Insurance Trust
h.   Federal Estate and Gift Tax Rates and Credits
i.    Split Dollar Final Regulations
j.    Split Dollar IRS Notice 2002-8
k.   Split Dollar IRS Notice 2002-59
l.    Split Dollar Rev Rul 2003-105

GROUPING WITHIN DOCUMENT SETS

Highlights Of The Plan:  Each Highlight summarizes the plan’s features and reviews the advantages offered by its use.

Technical Preface:  Each Preface discusses the related documents in more technical terms and usually includes the specific tax citations pertinent to the concept.

Resolution:  Many plans require Resolutions and, where appropriate, specimens are included.

Agreement:  Most plans require contractual Agreements and, where appropriate, specimens are included.

Appendix:  Many document sets include an Appendix.  Do not overlook the Appendix if one is included in the document set you intend to review because it contains invaluable supplemental information.  (For example, in the BUSINESS BUY-SELL section, each Appendix examines business valuation alternatives.)  In addition, important tax citations are often contained in an Appendix.

ERISA Compliance:  Where appropriate, specimen ERISA material is included -- either in a separate document or contained in the language of the benefit Agreement.

Notice and Consent and Annual Reporting Form:  These specimen documents are included in appropriate document sets.

IMPORTANT NOTICE

The material in Documents On A Disk and Documents On The Net is presented as a general guide, and specific legal and tax evaluation is required on every aspect of every plan prior to implementation.  The specimen documents are not designed as fill-in-the-blank forms.  Any document that appears to apply to a given situation must be reviewed and approved by a taxpayer’s own legal and tax counsel.

(Rev: 5/25/07)