LBSD Sample Presentations

Loan-Based Split Dollar

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.

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.

Employer offsets executive’s loan interest with a gross-up bonus;
Policy loan repays employer at retirement;
Additional policy loans for retirement income.

Employer offsets executive’s loan interest with a gross-up bonus;
Executive repays loan over 5 years beginning in year 16;
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

Parent loans funds for annual premiums to the trust;
Trust pays loan interest to the parent using gifts from the parent.

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.

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