We work with profitable C-corporation owners and their CPAs on structured planning alternatives to traditional dividend distributions.
The Planning Context
Profitable C-corporations often accumulate substantial retained earnings.
When shareholders consider extraction, dividends are the default mechanism.
While appropriate in many cases, dividend distributions can:
Trigger double-layer taxation
Permanently remove corporate capital
Reduce strategic flexibility for succession or estate planning
In certain cases, CPAs may wish to evaluate structured alternatives.
Structured Insurance Funding (High-Level Overview)
In select scenarios, corporate funds may be advanced under a documented structure to support permanent life insurance planning for a shareholder.
Key elements may include:
Formal loan agreement
Defined corporate recovery rights
Interest accrual consistent with applicable federal rates (if applicable)
Written documentation and reporting coordination
The corporation’s balance sheet integrity and recovery mechanics are central to design.
This is not a distribution substitute. It is a capital positioning strategy.
Suitability Profile
May be appropriate when:
C-corp with stable profitability
Material retained earnings
Long-term planning horizon
Estate liquidity or succession objectives
CPA comfortable overseeing documentation
Not appropriate when:
Liquidity constraints exist
Owner requires immediate income
Documentation discipline is weak
Corporate governance is informal
CPA Coordination
Our role is limited and technical.
We:
Provide structural modeling
Coordinate carrier underwriting and policy design
Assist with documentation templates
We do not provide tax opinions or replace the client’s CPA.
All implementations are reviewed in coordination with the CPA prior to execution.
Engagement Process
CPA-level structural discussion
Preliminary feasibility modeling
Documentation coordination
Carrier selection and underwriting
Ongoing alignment for reporting