Restricted Property Trust (RPT)
Stable, conservative vehicle for tax mitigation and asset appreciation.
What It Is
The restricted property trust (RPT) is an employer-sponsored plan that provides business continuity through a death benefit, and potentially long-term cash accumulation and income distribution.
The RPT is an attractive alternative to deferred compensation plans for successful business owners who wish to mitigate income taxes and appreciate assets.
How it works
  1.  The corporate entity establishes two irrevocable trusts, known as the Death Benefit Trust and the Restricted Property Trust.
  2. The Taxpayer agrees to make contributions to the Death Benefit Trust in the accordance with a Death Benefit Agreement entered into between the Taxpayer and employee.
  3. Fully tax-deductible contributions are made by the business to the RPT for a select group of participants. Of this, a portion is considered current taxable income to the participant. The remaining contribution finds a life insurance policy.
  4. Participant recognizes income on policy cash values in excess of value created by 83(b) elections and any growth attributable. Tax due is paid from Policy Values.
  5. After the policy is distributed, the participant can maintain it for the death benefit, use it to generate non-taxable cash flow, exchange it for a larger income stream (annuity) or potentially exchange it for a larger, guaranteed death benefit.

Benefits

  • 100% tax-deductible to the business or partnership

  • only 30% of the contribution is taxable to the participant

  • Reduced taxable income

  • Complete participant flexibility

  • Plan assets fully protected from the creditors

  • Zero interference with any current qualified plan assets or contribution

  • Business continuity is insured through death benefit

  • May be used for any personnel selected by trustee

The Seth Risk Management Difference

  • Seth Risk Management is a full-service insurance brokerage firm with over 25 years of combineD experience between Partners

  • Seth Risk Management and its partners provide practical support throughout the entire lifecycle of the transaction, offering comprehensive monitoring and support

  • This includes the establishment of the restricted property trust, the annual contribution process, and rollover exit.

  • We provide the peace of mind that insurance is designed to provide

Ideal Candidates

  • Medical Groups

  • Financial Services Firms

  • High Profit Partnerships

  • Private Companies with Executives Earning a Minimum $600k/year

  • C-Corps, S-corps, LLC's, Partnerships