Small Business Financial Planning

Small Business Financial Planning

Business Planning Checklist

• Formation Stage
• Accumulation Stage
• Mature Stage

Types of Business Insurance Concerns

• Buy-Sell Plan
• Compensation Programs
• Deferred Compensation
• Key Employees
• Split Dollar

Split Dollar

A plan to purchase needed personal life insurance at a lower cost through the sharing of premiums by an employer and employee. Helps the employer retain key employees with a fringe benefit that has minimal effect on cash flow and surplus account of the business. The employer can recover its contributions to premium payments when the policy is surrendered or as the result of a death claim.

Advantages:

• Taxes may be saved by using corporate dollars
• The employee receives life insurance coverage that is needed
• The employer recovers its premiums paid to the policy

Split Dollar may have estate tax advantages, especially with the use of an irrevocable trust.

back to Small Business Financial Planning