Estates, Gifts, And Trusts (EGT)

Estate Planning for the Corporate Executive (Portfolio 808)

  • This Portfolio analyzes typical problems arising in wealth transfer planning for corporate executives.


Bloomberg Tax Portfolio, Estate Planning for Corporate Executives, No. 808, deals with typical problems arising in wealth transfer planning for corporate executives. A lack of liquidity and concentration of investments in the employer’s stock (particularly if the employer is a closely held corporation) may present special planning and administration problems for executives and their fiduciaries. In addressing liquidity concerns, this Portfolio discusses the tax consequences of the use of life insurance in general, and the continued viability of split-dollar life insurance arrangements for gift and estate tax purposes.

This Portfolio discusses the relevance of standard estate planning techniques (e.g., inter vivos gifts and trusts, life insurance and life insurance trusts, and the use of the marital gift and estate tax deductions) to the special problems of corporate executives. The drafting of will and trust instruments (particularly fiduciary powers) to provide sufficient flexibility to meet the liquidity needs of the estates and beneficiaries of the executives, are discussed.

In addition, planning for corporate executives requires extensive knowledge of planning techniques relating to executive compensation plans. This Portfolio, therefore, examines nonqualified deferred compensation (NQDC) plans and nonqualified stock options. With respect to NQDC, this Portfolio discusses how §409A and the related regulations and IRS Notices impact the structure of these plans and in particular, the treatment of death benefits under these plans. This Portfolio also discusses planning for qualified pension and profit-sharing plans and qualified stock options, but the discussion of those arrangements is limited and further reference should be made to the Compensation Planning Portfolios in the U.S. Income Series, as well as 814 T.M., Estate and Gift Tax Issues for Employee Benefit Plans.

In regards to the special concerns of owners of closely-held businesses, this Portfolio considers buy-sell agreements and the opportunities to pay an estate tax liability in installments. In regards to closely held businesses, further reference may be made to 809 T.M., Estate Planning for Owners of Closely Held Business Interests.

This Portfolio may be cited as Drennan, Goldstein, and Erblich, 808 T.M., Estate Planning for Corporate Executives.

Table of Contents

I. Introduction
II. Estate Planning Problems of the Executive
III. Estate Planning Before, During, and Beyond the Age of Uncertainty
IV. Income in Respect of a Decedent
V. Nonqualified Deferred Compensation for Taxable Corporations
VI. Nonqualified Deferred Compensation for Tax-Exempt Organizations
VII. Death-Benefit-Only Plans
VIII. Qualified Retirement Plans
IX. Stock Options
X. Split-Dollar Insurance Arrangements
XI. Life Insurance
XII. Special Issues for Owners of Closely Held Businesses
XIII. Non-U.S. Citizen Spouses

William Drennan, II
Professor of Law
Southern Illinois University School of Law
Christopher Erblich
Managing Partner
Husch, Blackwell & Sanders, LLP
Michael G. Goldstein
Executive Vice President, President Corporate Strategies Group
The Gottlieb Organization
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