Life Insurance & Buy-Sell Arrangements

The American Bar Association is sponsoring a teleconference CLE program on April 5, 2006 entitled Life Has Never Been So Good:  Using Life Insurance Funded Buy-Sell Arrangements for Pass-through Entities.  The program is described as follows:

Life insurance is often used as a funding tool in buy-sell arrangements for owners of closely held businesses.  All too often, practitioners lack an understanding of the intricate tax effects that life insurance can have—especially the effects it can have on pass-through business entities.   

This program will awaken you to the benefits that life insurance can provide as a funding vehicle for buy-sell arrangements with a specific focus on S Corporations and Limited Liability Companies (LLCs). After this program, you will be able to:

• Recognize when an entity purchase may be more advantageous than a cross-purchase
• Explain how proceeds from company-owned life insurance impacts an owner’s basis
• Examine life insurance benefits from the use of an entity redemption for pass-through entities
• Avoid transfer for value problems