Generational Split Dollar Planning: A Multi-Generational Approach for Legacy-Minded Families
By: HORAN Wealth
This article highlights the key benefits and risks of General Split Dollar (GSD) planning. Written by our partner, M Financial—a leading collaborative of thought leaders—it provides an in-depth exploration of this wealth management strategy, including insights from actual cases. GSD planning can benefit not just the second generation but the third as well, ensuring long-term financial security for your family.
For your ease and understanding, we've created this executive summary of the full article. If this is relevant to you, we encourage you to explore the full piece or reach out to us at Private Wealth Services at HORAN Wealth.
What is Generational Split Dollar Planning?
Generational Split Dollar (GSD) planning is a wealth strategy that leverages irrevocable life insurance trusts (ILITs) to facilitate tax-efficient wealth transfer across multiple generations. It allows a business or individual to fund a life insurance policy for heirs while maintaining flexibility and liquidity during their lifetime. By structuring the arrangement properly, families can minimize estate taxes, enhance wealth preservation, and provide financial security for not just their children but also their grandchildren.
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How to Reduce Risks and Ensure Better Success
To make the most of GSD planning, consider these key actions:
- Engage Experienced Professionals: Work with legal, tax, and wealth advisors to ensure the structure aligns with IRS regulations and long-term goals.
- Monitor & Adjust Regularly: Given evolving tax laws and financial needs, ongoing reviews help keep the plan effective and compliant.
- Ensure Liquidity Planning: Properly structure funding to balance immediate financial needs with long-term generational benefits.
GSD planning is a valuable tool for affluent families seeking to preserve and pass on wealth effectively. However, it requires careful consideration and expert guidance to mitigate risks and optimize benefits.
At Private Wealth Services at HORAN Wealth, we guide and support accomplished investors, families, and businesses in navigating the complexities of greater wealth to live abundantly and productively, while building a legacy for future generations. Our insurance expert can help you integrate insurance planning into your wealth strategies, ensuring solutions that align with your family's legacy and financial vision.
If you'd like to explore whether this strategy is right for you and your family, you can contact us here. Or you can discover more about our Private Wealth Services page here.
HORAN Wealth is the marketing name of HORAN Securities, Inc. ("HSI") and HORAN Capital Advisors, LLC ("HCA"). Securities Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer, Member FINRA/SIPC. HORAN Wealth Management ("HWM") is the investment advisory firm. HCA is an affiliated investment advisory firm.
The information herein has been obtained from sources believed to be reliable but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results. Market conditions can vary widely over time and there is always the potential of losing money when investing in securities. HORAN Wealth and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
