Massachusetts Split-Dollar Life Insurance is a unique form of life insurance arrangement that allows two parties, typically an employer and employee or a business owner and key employee, to share the cost and benefits of a life insurance policy. This type of life insurance has gained popularity in Massachusetts due to its suitability for business succession planning, executive compensation, and estate planning purposes. In a Massachusetts Split-Dollar Life Insurance arrangement, the employer or business owner pays the premiums of the life insurance policy while the employee or key employee is the insured. The policy is owned by one party while the other has an interest in the policy's cash value or death benefit, depending on the terms of the agreement. Generally, the employer retains an interest in the policy's cash value and is reimbursed for the premiums paid upon death, while the employee's beneficiaries receive the remaining death benefit. There are two common types of Massachusetts Split-Dollar Life Insurance: 1. Equity Split-Dollar: In this type of arrangement, the employer or business owner's interest in the policy grows over time and usually becomes equal to the premiums they have paid. The employee's beneficiaries receive the death benefit remaining after the employer's interest is reimbursed. Equity Split-Dollar arrangements are often used in business succession planning to provide an orderly transfer of ownership upon the death of a key employee or business owner. 2. Loan Split-Dollar: In a Loan Split-Dollar arrangement, the employer or business owner loans the premiums to the employee, which are typically repaid from the policy's cash value. The employer may charge an interest on the loan or forgive it over time. Upon the insured's death, the employer is reimbursed for the loan amount and interest, while the employee's beneficiaries receive the remaining death benefit. Loan Split-Dollar arrangements offer flexibility in terms of repayment and can be used as a form of executive compensation. Massachusetts Split-Dollar Life Insurance provides various benefits, including tax advantages, wealth transfer, protection against financial loss due to the death of a key employee, and the potential for accumulated cash value. It is essential to consult with a knowledgeable insurance professional or financial advisor to understand the specific terms, tax implications, and suitability of Massachusetts Split-Dollar Life Insurance for your unique circumstances.