Split-Dollar Agreement - Non-Equity Collateral Assignment Arrangement - Economic Benefit Approach-Minority Owner orSplit-Dollar Agreement -- Non-Equity Collateral Assignment Arrangement - Economic Benefit Approach - Minority Owner or Key Executive Owned
Overview of this form
The Split-Dollar Agreement - Non-Equity Collateral Assignment Arrangement is a legal document that establishes the terms under which life insurance policy benefits are shared between an employer and an employee. Unlike traditional life insurance contracts, this agreement facilitates a financing arrangement where premiums and benefits are split based on an economic benefit approach. It is particularly suited for situations where an employer pays for the premiums while the employee retains ownership of the policy, making it an effective tool for ensuring employee retention and financial security.
Key components of this form
- Policy ownership: Clearly defines the ownership structure of the life insurance policy.
- Premium payment method: Outlines the employerâs responsibility for premium payments and tax implications.
- Collateral assignment: Details how the employer's financial interest is secured through collateral assignment of the policy.
- Division of death proceeds: Specifies how death benefits will be distributed between the employer and the employeeâs beneficiary.
- Termination conditions: Lists the scenarios under which the agreement may be terminated.
- Claims procedure: Provides a clear claim process for beneficiaries if a claim becomes necessary.
When to use this document
This form should be used when an employer wants to assist an employee with their life insurance needs while securing their financial investment through a partial interest in the policy. It is particularly useful in retaining key employees or minority owners who may otherwise have concerns about their insurance coverage. Additionally, this agreement is ideal when an employee wishes to establish private insurance while the employer is willing to pay for the insurance premiums.
Intended users of this form
- Employers looking to provide life insurance benefits to key employees or minority owners.
- Employees who want to obtain life insurance with assistance from their employer.
- Business owners seeking to retain talent by offering economic benefits through insurance arrangements.
Instructions for completing this form
- Identify the parties: Clearly enter the names and details of the employee and employer in the specified fields.
- Specify the policy information: Fill in details of the life insurance policy, including policy number and insurance provider.
- Outline premium payment terms: Detail how and when the employer will pay the premiums for the policy.
- Designate beneficiaries: Specify who will receive the death benefit and ensure correct beneficiary names are included.
- Execute the agreement: Both parties need to sign the agreement, followed by any required notarization or witness signatures.
Notarization guidance
This document requires notarization to meet legal standards. US Legal Forms provides secure online notarization powered by Notarize, allowing you to complete the process through a verified video call, available 24/7.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to accurately identify the beneficiary, which may complicate claims.
- Not specifying the correct policy details, leading to confusion.
- Forgetting to include tax implications of the employer's contributions as taxable income for the employee.
- Overlooking the need for both parties to sign the agreement.
Why complete this form online
- Convenience: Easily download and fill out the form from the comfort of your home or office.
- Editability: Customize the form as per your specific agreement requirements.
- Reliability: Ensure that the document meets legal standards as drafted by licensed attorneys.
