Chapter 12 Planning Opportunities With Life Insurance

Index

Section 12.1 Introduction
Section 12.2 “Life Insurance” as Defined for Tax Purposes
Section 12.3 Types of Policies
Section 12.4 Term Life Insurance Policies
Section 12.5 Whole Life or “Permanent” Insurance Policies
Section 12.6 Variable Life Insurance Policies
Section 12.7 Universal Life Insurance Policies
Section 12.8 Variable Universal Life Insurance Policies
Section 12.9 Adjustable Life Insurance Policies
Section 12.10 Survivorship Policies
Section 12.11 First-to-Die Life Insurance Policies
Section 12.12 Significant Options and Features With Respect to Life Insurance Policies
Section 12.13 Typical “Riders”
Section 12.14 Dividend Options
Section 12.15 Policy Loans
Section 12.16 Income Taxation Concepts
Section 12.17 “Tax-Free” Build Up of Value Inside Policy
Section 12.18 Dividends on Life Insurance Policies
Section 12.19 Cash Withdrawals From Policies
Section 12.20 Taxation Upon Surrender of Policy
Section 12.21 Exclusion of Death Benefit Proceeds
Section 12.22 Transfer for Value Rule
Section 12.23 Deductibility of Life Insurance Premiums
Section 12.24 Deductibility of Policy Loan Interest
Section 12.25 Taxation Upon Sale of Life Insurance Policy
Section 12.26 Alimony and Maintenance Issues
Section 12.27 I.R.C. § 1035—Tax-Free Exchanges of Life Insurance Policies
Section 12.28 Estate and Gift Taxation Issues
Section 12.29 Gifts of Life Insurance Policies and Proceeds
Section 12.30 Annual Gift Tax Exclusion
Section 12.31 Gifts of Proceeds
Section 12.32 Valuation Problems
Section 12.33 Estate Taxation Issues
Section 12.34 Inclusion in Estate Because of “Incidents” of Ownership
Section 12.35 Inclusion Because of Transfer Within Three Years of Death and Techniques for Avoiding Inclusion
Section 12.36 Inclusion of Policy in Estate Other Than That of Insured
Section 12.37 Estate Tax Marital Deduction
Section 12.38 Split-Dollar Arrangement With Employer
Section 12.39 Split-Dollar Arrangement With Spouse
Section 12.40 Generation-Skipping Problems
Section 12.41 Economic Growth and Tax Relief Reconciliation Act of 2001
Section 12.42 Personal Life Insurance Trusts
Section 12.43 Revocable Trusts
Section 12.44 Irrevocable Life Insurance Trusts
Section 12.45 Generation-Skipping Planning
Section 12.46 Selecting a Trustee
Section 12.47 Employee Benefits
Section 12.48 Group Term Life Insurance
Section 12.49 Qualified Plan Insurance
Section 12.50 Nonqualified Executive Compensation Plans
Section 12.51 Business Life Insurance (“Key Person Insurance”) and Cross-Purchase Agreements
Section 12.52 Nondeductibility of Premiums
Section 12.53 Exclusion From Income of Death Proceeds
Section 12.54 Alternative Minimum Tax and Earnings and Profits Problems Caused by Receipt of Death Proceeds
Section 12.55 Buy/Sell Agreements—Formats
Section 12.56 Typical Flaws of Buy/Sell Agreements
Section 12.57 Insurance Proceeds as Compensation
Section 12.58 S Corporations
Section 12.59 Charitable Giving With Life Insurance
Section 12.60 Tax Deduction, Valuations of Gifts, and Tax Effects
Section 12.61 Tax Effects on Charities
Section 12.62 Achieving Income Tax Benefits for Heirs
Section 12.63 More on Split-Dollar Life Insurance Plans
Section 12.64 I.R.S. Notice 2002-8
Section 12.65 Final Regulations
Section 12.66 Endorsement Plans (“Economic Benefit Regime”)
Section 12.67 Collateral Assignment Plans (“Loan Regime”)
Section 12.68 Purchasing Life Insurance on Younger Generation Family Members
Section 12.69 Use of Decanting Trusts
Section 12.70 Joint Irrevocable Life Insurance Trust Agreement
Section 12.71 Letter to Clients