What is a Funded Death Benefit Plan?
A Death Benefit plan is a "non-qualified" plan where your company agrees to pay a death benefit equal to two times your salary for one of your designated heirs. It is non-qualified because you do not have to offer this plan to all employees and you can discriminate in favor of officers and directors. Your business can purchase life insurance to fund all or a portion of the benefit.
A Death Benefit Plan Reduces Taxes!
The Federal tax advantages to a Death Benefit Plan are:
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There are many situations in which a death benefit plan can be a useful tool for the small business and family-owned business. When the death benefit plan is tied into the estate plan and business plan, it can be a powerful tax saving and tax shifting tool. The plan requires careful drafting by your tax and business attorney and coordination with your insurance broker and other financial advisers. Call Ronald J. Cappuccio, J.D., LL.M.(Tax) at (856) 665-2121.