The “Big Deal” is the IRS may have finally closed a huge estate tax loophole — the use of abusive “Death Bed” split-dollar arrangements to generate discounts of 90 percent or more for wealthy individuals with reduced life expectancies. The bigger deal, often overlooked, is that traditional split-dollar life insurance plans are a tremendous planning tool to fund estate tax-free trusts without paying gift taxes. But first, let’s look at what most planners consider an overly aggressive split-dollar arrangement.
