Split dollar

[card]

I always read articles about the use of endorsement split dollar as an informal funding vehicle for a NQDC plan, and I've read the Miller case, but does anyone see this being done in practice? I saw a survey once that showed (I think) 2% (maybe less) of NQDC plans using split dollar.

Just curious about how common it is in real life.

Thanks.

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[GBurns]

After the many successful attacks by the IRS and the new rules, this should be a very rare rarity.

[david rigby]

... a very rare rarity.

Is that a double negative?

[GBurns]

I thought it appropraite so as to indicate a possible no no situation.

[card]

The IRS attacks haven't changed endorsement split dollar all that much- which was the usual method (I think) of informally funding NQDC plans.

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[GBurns]

If that is the case why have all the major players redesigned their marketing materials etc and discontinued so many plan designs?

Here is what Insmark put out:

http://www.insmark.com/ProducersCenter/Spl...Regs_Report.pdf

Notice the number of Nos and Do nots related to endorsement split dollar starting from the very first page.

A simple Google search will bring you hundreds of articles with warnings etc.

[card]

Thanks but the article you cite just goes to confirm that standard employer owned endorsement split dollar continues as a viable product.

Equity split dollar is the target.

[GBurns]

Split Dollar is not an insurance product it is a method of funding premiums.

The fact that a funding method remains viable does not mean that the old applications (uses) remain the same, or that the accounting remains the same, they do not.

[card]

From the "hundreds" of articles, a quote from the one YOU cited:

7. Continue to use the following Endorsement Split Dollar plans after September 17, 2003:

a) Endorsement Split Dollar in which the policy owner is an employer or a parent. For

illustrations of this variation, see the module of the same name under the Executive

Benefits tab in the InsMark Illustration System. Also see the module named Private

Endorsement Split Dollar under the Private Split Dollar tab in the InsMark Illustration

System. There should be no adverse tax consequences associated with the policy cash

values caused by the final split dollar regulations.

what exactly is your point?

[TCWalker]

To answer the original post; it exists. Product installations are often so convoluted and sufficiently off the radar screen I doubt if they'd be accurately recognized in any census count. I remember one survey where the client's key financial advisors where asked if their client had opted for a split dollar funded insurance product and some 25% weren't sure.

[GBurns]

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Apparently you are trying to justify something while I am not. I also do not care whether you or anyone else uses split dollar funding. Note I said funding not product, the difference between the 2 things I hope you now understand.

I noted that you chose to quote Item 7 (a) which is only a subsection of 1 "Bullet" and you totally disregarded the others. What happened to Items 4, 5 and 6?

You also disregarded the underlined warning which appears after Item 7 (b) which states:

"If you have any of these plans in force, we strongly recommend modifying them to eliminate the contingent assigment -- subject, of course, to the approval of your client's legal and tax advisers."

This clearly means that whatever it is that you call "Equity Split Dollar" is not the sole target as you think.

Endorsement split dollar which is the term you used in your OP INCLUDES, as is stated in the Insmark Analysis, Equity Endorsement Split Dollar which Insmark warns against in the first section titled "Do No New Business ...".

That is my point.

Why do you want to argue about a subject about which your knowledge is limited? Just read the articles and learn the concepts and their applications first.

[card]

"Why do you want to argue about a subject about which your knowledge is limited?"

Funny, I was going to ask you the same thing except I am apparently far more civil than you.

All these words, GBurns, just to try to obfuscate the fact that you gave a ridiculous response to begin with, and then compounded it with an even more ridiculous defense? Or is Gracie really writing your responses?

My question was clear. You had nothing to add, yet spoke solely to hear yourself speak. (An ingrained habit, from what I've seen on these boards.)

But to answer your most recent absurd response, since you asked, I did not mention "4 and 6 and 6(?)" because they are not applicable. Not only that, in the words of Insmark, they are "odd arrangements." In fact, Insmark says in both paragraphs 4 and 6: "Most of you have never used this variation, and InsMark has never illustrated it." (And if you really meant paragraph 5, instead of the second "6," Insmark says the same things about that arrangement.)

I cited paragraph 7 because it says continue to use "Endorsement Split Dollar in which the policy owner is an employer..." And I'm sure you know, since you're apparently an expert on NQDC plans as well as every subject matter on Benefitslink, employer owned endorsement split dollar is often suggested as an informal funding vehicle for NQDC plans. My question asked whether practitioners saw this happening in the real world. Not whether endorsement split dollar is still a viable product. That was (and is) a given. (Want to pounce on the word "product" again? Really, go ahead.)

Have you even read what you cited (twice now)?

Perhaps you should reconsider the style you've adopted on these boards as an abrasive condescending bully. Even worse, an uninformed one.

This is my last post directed at you.

And thank you TC.

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[GBurns]

The Insmark comment is obviousy written "tongue in cheek". Look at what was on the Insmark system pre Winn Dixie (pre 2000).

You are right, I should know enough to have known that when you used the term "endorsement split dollar" you did not mean endorsement split dollar but meant something else.

As far as being civil goes, What did you expect when you closed an intellectually dishonest post with a snide challenge? Your comment was unnecessary even if you did not understand and see the point. Why get upset at simple tit fot tat? You started it, not me.

To say "I cited paragraph 7 because it says continue to use "Endorsement Split Dollar in which the policy owner is an employer..." is dishonest. First, Sole and majority shareholders are also employers in most cases, so there is no real difference in ownership status althought there might be a difference in applicability of each.

Then, you cited 7(a) but disregarded the warning AFTER 7(b) which is in the same section. The warning suggests modifying existing plans and the article further states that Insmark will be making needed changes to their system. So it is "Continue to use.." BUT with modification to meet the new laws. In other words it is a target also not just "Equity" plans as you think.

As far as being uninformed goes, at least my understanding of the terms is supported by Insmark and the articles in the suggested Google search.

[card]

nice try. ok, one last time.

I asked if anyone sees endorsement split dollar used as an informal funding vehicle for NQDC plans in the real world. (They can be, they have been, and they will continue to be. I was interested in how common they are.)

GBurns said:

"After the many successful attacks by the IRS and the new rules, this should be a very rare rarity," and

"I thought it appropriate so as to indicate a possible no no situation."

Now what the hell does 7(b) have to do with this? Does 7(b) say endorsement split dollar is gone? Does 7(b) say endorsement split dollar can't be used as an informal funding vehicle for NQDC plans? That it should be a very rare rarity? Was anyone talking about a roll out of cash values to an employee? Talk about intellectual dishonesty (you're very good at it)- did your first post say "informally funding a NQDC plan with endorsement split dollar containing an equity rollout guaranteed by a contingent assignment should be a very rare rarity?" Is that what you really meant?

And what was "tongue in cheek?" 7(a)? Insmark's statement to continue to use standard endorsement split dollar is tongue in cheek? Are you serious? HA HA HA!!!

You are something. But again, I'm too civil to say exactly what that might be.

Really, this is it. You're not worth the time. And I don't want any part of your attempt to reach the 3,000 post plateau.