Loan-Based Split Dollar | Sample Presentations

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Loan-Based Split Dollar

• Presentation #1
  Employer offsets executive’s loan interest with a gross-up bonus.
  Note: The Loan-Based Split Dollar module can reflect policy loans and/or withdrawals (for example, for retirement income for the executive). LB-SD Presentation #1 does not illustrate such policy activity; however, LB-SD Presentations #2, #3, and #4 do.
• Presentation #2
  Employer offsets executive’s loan interest with a gross-up bonus;
  In retirement years, policy loans used for loan interest to employer;
  Additional policy loans for retirement income.
• Presentation #3
  Employer offsets executive’s loan interest with a gross-up bonus;
  Policy loan repays employer at retirement;
  Additional policy loans for retirement income.
• Presentation #4
  Employer offsets executive’s loan interest with a gross-up bonus;
  Executive repays loan at beginning of year 21;
  Employer bonuses the funds for the repayment;
  Policy loan offsets the executive’s income tax on the bonus;
  Additional policy loans for retirement income.

Loan-Based Private Split Dollar

• Presentation #1
  Parent loans funds for annual premiums to the trust;
  Trust pays loan interest to the parent using gifts from the parent.
• Presentation #2
  Parent loans a single sum to the trust;
  Trust pays annual premiums from the single sum;
  Trust pays loan interest to the parent using gifts from the parent.
• Superfunding Presentation #3
  Using Survivor Universal Life, grandparents loan a single sum to the trust, calculated to maximize the available annual gift exclusions (42);
  Trust pays annual premiums from the single sum;
  Trust pays loan interest to the grandparents using gifts from the grandparents.
• Superfunding Presentation #4
  Using Variable Survivor Universal Life, grandparents loan a single sum to the trust, calculated to maximize the available annual gift exclusions (42);
  Trust pays annual premiums from the single sum;
  Trust pays loan interest to the grandparents using gifts from the grandparents.