Hi,(Please don't shoot the messenger here) ... but there arew several issues.First the value needed ("Valuable Consideration"); You can either use (1) interpolated terminal reserve value* OR (2) PERC stands for Premiums, Earnings, and Reasonable Charges. (Both of these are complicted calculations)** Treas. Reg. 25.2512-6(a), Example (4)* Rev. Proc. 2005-25, Section 3.02.And more important (is the fact that) This is not Just the cash value, but likely a MUCH larger number. .The comments about self-dealing above were "down the right path." The objective of a retirement plan
has to be funding a retirement with tax deferred dollars that (unless the person dies prematurely) eventually are taxed, ...And if the person dies pre-maturely, there are some options for deferring for a few more years, but eventually the beneficiaries
have IRD (Income in respect of a decedent) the tax dollars eventually have to be paid..So, back to the "valuable consideration"If this is done appropriately for ENOUGH money ... THEN you would have funded the retirement plan (by having the ILIT - Irrevocable Life Insurance trust - buying for enough money that NOW the retirement plan has that money in it that WILL be taxed eventually..I think what you'll find is that cost for doing this (between coming up with enough money AND still having that money taxed when it DOES come out of the plan - the money that purchased the policy) the strategy will not have save you or your heirs anything in the long run..A few resources for you:http://benefitslink.com/boards/index.php/topic/45953-life-insurance-purchase-from-qualified-plan-by-ilit/http://www.vebaplan.org/https://www.law
.cornell.edu/cfr/text/26/1.72-16.I hope you'll rate
me positively, using the stars on your screen … (that's the only way we get credit
for the work here) … based on thoroughness and accuracy, rather than any good news/bad news content ... Hopefully, having all the facts will help you "see around some corners."