A profit-sharing plan (PSP) could purchase second-to-die insurance
Also, the IRA Conversion Plan provides a program to increase the after-tax size of an inheritance by using distributions for the purchase of life insurance inside an irrevocable trust; a Spousal Lifetime Support provides for needs of a surviving spouse through second-to-die insurance
; a Flexible Irrevocable Trust covers estate-tax liquidity needs; and a Standby Trust addresses the uncertainties of the estate-tax phaseout by allowing an insured couple to put off placing a survivorship policy into an irrevocable life insurance trust until after the first spouse's death.
In Letter Ruling 9745019, this rationale was extended to a properly structured second-to-die insurance
Interest Deduction Disallowance for Second-to-Die Insurance
. The Taxpayer Relief Act of 1997 imposed interest deduction disallowances for split-dollar plans utilizing second-to-die insurance
Premium payments for the second-to-die insurance
should come from income generated by the family partnership.
For example, second-to-die insurance
is basically a permanent product.
Married couples often buy second-to-die insurance
for the trust, McDonald said.
Applicants often object to the cost of second-to-die insurance
. To lower the cost, the agent will include term insurance in the coverage package.
A better solution may be to purchase survivorship or second-to-die insurance
, where the proceeds are paid when the second spouse dies.
During the last few years a new type of insurance product, survivorship life insurance (SLI) or second-to-die insurance
, has become an important tool for the estate planner.
Survivorship Life: Also called second-to-die insurance
, survivorship life insurance covers the lives of two people and pays benefits only after both people have died.
Lee Slavutin, a principal of Stern Slavutin 2, Inc., New York, says this private split-dollar technique is most tax-efficient when funded with a second-to-die insurance