Wisconsin Split-Dollar Life Insurance

• Category: Corporations - Public - Disclosure and Notices
• State: Multi-State
• Control #: US-CC-24-263D
• Format: Word; Rich Text

Description

This sample form, a detailed Split-dollar life insurance document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats. Wisconsin Split-Dollar Life Insurance is a specialized life insurance arrangement that offers unique benefits and tax advantages for both employers and employees. Split-dollar life insurance is a type of policy in which two parties, such as an employer and employee, agree to share the premium costs, policy ownership, and death benefits of a life insurance policy. In Wisconsin, there are primarily two types of Split-Dollar Life Insurance arrangements commonly used: 1. Irrevocable Split-Dollar Life Insurance: This type of split-dollar arrangement involves an employer providing a permanent life insurance policy for the employee. The employer pays the policy premiums, while the employee has the right to designate the beneficiaries. It is often used as an effective way to provide key employee benefits, estate planning, and executive compensation. 2. Collateral Assignment Split-Dollar Life Insurance: In this type of split-dollar plan, the policy is owned by the employee, and the employer loans the amount equal to its premium payments. The employee designates the beneficiary and owns the policy's cash value. However, upon the employee's death, the employer's loan amount is repaid from the policy proceeds, and the remaining amount is provided to the designated beneficiary. Both types of Wisconsin Split-Dollar Life Insurance arrangements have various advantages. For employers, they can use this strategy to provide a valuable employee benefit and attract top talent. It also allows the company to recover its premium payments upon the employee's death, as the death benefit repays the employer's loan amount. Additionally, it can help with executive compensation and serve as an effective succession planning tool. Employees benefit from Split-Dollar Life Insurance as well. They receive life insurance coverage at a lower cost or no cost, depending on the agreement. The cash value of the policy can grow over time, providing potential tax-deferred growth. They also gain control over the policy, such as designation of beneficiaries, access to policy loans, and potential supplemental retirement income. Wisconsin Split-Dollar Life Insurance arrangements require careful planning and consideration of the tax implications. Employers and employees should consult with experienced financial advisors or insurance professionals to develop a customized plan that meets their specific needs and goals. In summary, Wisconsin Split-Dollar Life Insurance is an effective and flexible life insurance arrangement commonly used to provide valuable benefits to both employers and employees. The two main types, Irrevocable and Collateral Assignment Split-Dollar Life Insurance, offer different ownership and repayment structures. By utilizing this strategy, businesses can enhance their employee benefits packages, provide executive compensation, and plan for succession, while employees enjoy valuable life insurance coverage and potential financial benefits.

Wisconsin Split-Dollar Life Insurance is a specialized life insurance arrangement that offers unique benefits and tax advantages for both employers and employees. Split-dollar life insurance is a type of policy in which two parties, such as an employer and employee, agree to share the premium costs, policy ownership, and death benefits of a life insurance policy. In Wisconsin, there are primarily two types of Split-Dollar Life Insurance arrangements commonly used: 1. Irrevocable Split-Dollar Life Insurance: This type of split-dollar arrangement involves an employer providing a permanent life insurance policy for the employee. The employer pays the policy premiums, while the employee has the right to designate the beneficiaries. It is often used as an effective way to provide key employee benefits, estate planning, and executive compensation. 2. Collateral Assignment Split-Dollar Life Insurance: In this type of split-dollar plan, the policy is owned by the employee, and the employer loans the amount equal to its premium payments. The employee designates the beneficiary and owns the policy's cash value. However, upon the employee's death, the employer's loan amount is repaid from the policy proceeds, and the remaining amount is provided to the designated beneficiary. Both types of Wisconsin Split-Dollar Life Insurance arrangements have various advantages. For employers, they can use this strategy to provide a valuable employee benefit and attract top talent. It also allows the company to recover its premium payments upon the employee's death, as the death benefit repays the employer's loan amount. Additionally, it can help with executive compensation and serve as an effective succession planning tool. Employees benefit from Split-Dollar Life Insurance as well. They receive life insurance coverage at a lower cost or no cost, depending on the agreement. The cash value of the policy can grow over time, providing potential tax-deferred growth. They also gain control over the policy, such as designation of beneficiaries, access to policy loans, and potential supplemental retirement income. Wisconsin Split-Dollar Life Insurance arrangements require careful planning and consideration of the tax implications. Employers and employees should consult with experienced financial advisors or insurance professionals to develop a customized plan that meets their specific needs and goals. In summary, Wisconsin Split-Dollar Life Insurance is an effective and flexible life insurance arrangement commonly used to provide valuable benefits to both employers and employees. The two main types, Irrevocable and Collateral Assignment Split-Dollar Life Insurance, offer different ownership and repayment structures. By utilizing this strategy, businesses can enhance their employee benefits packages, provide executive compensation, and plan for succession, while employees enjoy valuable life insurance coverage and potential financial benefits.