The Client
A Family-held manufacturing/distributing business --- both spouses active and in their mid - 40's.
The Summary Overview
The business was growing so fast that the joint estate costs were estimated to be approximately $4 - 5,000,000 at the second death --- and the estate is expected to remain quite illiquid due to various complex factors including many children from past and present marriages/key employees/ownership ego/etc.
The Consideration
Develop liquidity via the use of a sophisticated split dollar arrangement between an irrevocable trust and their business --- utilizing no commission (ever) insurance and IRS approved methods to determine income tax consequences to the clients.
The Result
A corporate commitment of ~$325,000 over a 15 year period should provide ~$4,000,000 of liquidity (~10:1 ratio). The after-tax costs to clients will be approximately $ 1,866 over 15 years, high initial cash values provide enormous future flexibility (i.e. business ups and downs/tax law changes/divorce/etc.) and trust liquidity will be completely free of income and estate taxes.