Original article from American Banker by Chris Cumming June 25, 2014 Smaller banks are slowly adopting bank-owned life insurance as a way to counter shrinking loan margins and diminished returns on other investments. Community banks have traditionally been reluctant to buy life insurance on key employees, a common practice among big banks. But since the… Read more »
IRS Announces New Program to Audit 409A Compliance
R. David Fritz, Jr., CLU IRS Announces New Program to Audit 409A Compliance Last month, the Internal Revenue Service announced that a Compliance Initiative Project (CIP) was underway involving a compliance audit for Section 409A plans. The CIP will initially focus on fifty large companies; however, this foreshadows a much broader Section 409A initiative enforcement…. Read more »
Planning with Non-Profit Organizations
R. David Fritz, Jr., CLU- Managing Partner Many of you either sit on the board of a non-profit or have been asked to assist in determining compensation matters for key individuals within a non-profit organization. Planning for non-profit organizations is challenging compared to planning for executives within a for-profit organization. Let’s explore the key differences…. Read more »
Net Investment Income Tax – A New Playing Field
R. David Fritz, Jr., CLU- Managing Partner, Founder With the advent of the new net investment income tax (“NIIT”), there needs to be a change in thinking related to income tax planning arrangements and investments. The new net investment income tax (“NIIT”) imposes an additional 3.8% tax on passive income received by individuals, trusts, and… Read more »
Life Insurance as a Corporate Financing Tool
R. David Fritz, Jr., CLU Much of my experience with life insurance has centered on its use in business situations. In the business context, life insurance is traditionally associated with key person coverage, debt replacement and employee benefits. With the current economy, a new role emerged for life insurance—a tool in corporate finance. Corporate finance… Read more »
Banking Compensation and Nonqualified Benefit Plan Study
Executive Benefits Network is pleased to present our first benefit plan study. This study provides useful information to the banking community and reflects common market practices pertaining to Executive Benefit Plans. Using Executive Benefits Network’s database of 111 current clients, focused mainly on Banks in the Midwest region, Executive Benefits Network compiled, analyzed and organized… Read more »
Avoiding Inadvertent Taxable Gifts: Crummey Powers and Annual Exclusion Gifts to Trusts
R. David Fritz, Jr., CLU- Managing Partner and Founder, Executive Benefits Network Many individuals follow an annual gifting strategy that involves making gifts to trusts, including irrevocable life insurance trusts (ILITs), and rely on beneficiary withdrawal powers to avoid taxable gifts by qualifying the transfers as annual exclusion gifts. For gifts to trusts to qualify… Read more »
Tax Effects on BOLI & Nonqualified Plans in Bank Mergers & Acquisitions
R. David Fritz Jr., CLU- Managing Partner and Patric J. Marget, JD, CPA, CFP, CLU- Managing Director, Executive Benefits Network; Melaine D. Brandt, CPA- Partner, Wipfli, LLP Summary We have not seen the bombardment of mergers that was predicted quite yet. It seems that small banks with under $250 million in assets will be the… Read more »