In a typical private split-dollar plan, the insured funds a policy insuring their own life by advancing or loaning funds to an irrevocable life insurance trust (ILIT) and, in exchange, holds a split-dollar receivable.¹ With the December 31, 2025 sunset (halving) of current high gift, estate, and generation-skipping transfer tax (GST tax) exclusions fast approaching, this may be an ideal time to cleanup an in-force split-dollar plan by gifting the receivable and, optionally, future premiums to an irrevocable trust.

Market Trend: Interest rates remain somewhat elevated, and homes are continuing to appreciate at record levels. Many successful members of the baby-boomer generation are desiring to pass along residences and vacation homes to the next generation but have heard stories of mixed experiences with the Qualified Personal Residence Trust (“QPRT”) and are seeking an alternative.

Synopsis: QPRTs provide a way for taxpayers with appreciating residential real estate to transfer such real estate to the next generation at a discounted value. However, the highly inflexible and cumbersome rules relating to QPRTs often taint the benefits. One alternative, the remainder purchase marital trust (“RPM Trust”), may be able to take the best aspects of the QPRT while maintaining greater flexibility.  

This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.



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File Number 7547271.1