David C. Roark and Estate of Irene Roark, Deceased, David C. Roark, Executor - Page 9

                                        - 9 -                                         
          the gift.”  On January 29, 1999, Mrs. Roark passed away.  The               
          Roarks’ daughter, Connie R. Perrin, became the successor trustee            
          of the Roark Trust, and the arrangement continued.                          
               The only problem was that the Roarks were far from alone;              
          split-dollar agreements had become so widespread that Congress              
          stepped in.  In February 1999, bills were introduced in both the            
          Senate and the House to force charities to pay a 100-percent                
          excise tax on any amounts they had paid on life insurance                   
          policies covering their donors.  Because of the possibility that            
          the legislation would be made retroactive to the date it was                
          introduced,6 NCF stopped making payments on all the split-dollar            
          agreements it had.  As a result, NCF never made a premium payment           
          corresponding to Roark’s last $20,000 contribution.                         
               Once NCF stopped paying premiums, its death benefit in the             
          Roark policy was fixed under the Plan Agreement at $489,000.  As            
          IDS Life was continuously earning the accelerated payments,                 
          however, the amount of money that NCF stood to get if the policy            
          were terminated began to shrink.  And once IDS Life earned all of           
          the accelerated payments, NCF’s $489,000 interest would                     
          disappear.                                                                  
               NCF faced similar problems with the other split-dollar                 


               6 The legislation passed, and can now be found in section              
          170(f)(10).  Tax Relief Extension Act of 1999, Pub. L. 106-170,             
          sec. 537, 113 Stat. 1936.  Parts of it were indeed made                     
          retroactive to Feb. 8, 1999, the date of introduction.                      





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011