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For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan
The Dolgoff Plan is a proven
alternative to traditional
nonqualified plans. No other
NQ plan provides a business
with current and deferred
tax deductions that can
exceed the corporate
contributions — and provide
exceptional flexibility.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
History
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 1: The Corporation moves money from cash on
hand to a brokerage account. The money used will
always be after tax dollars – since this is a
nonqualified program.
 The annual corporate contribution is used to
purchase mutual funds or other investments/assets
allocations.
 This asset is always owned and controlled by the
corporation at all times.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 2: Using the full corporate account value as
collateral, the corporation leverages the account
and takes a margin loan.
 The brokerage firm lends its’ own money to the
corporation, the full value of the asset always
stays invested.
 This asset is always owned by the corporation
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 3: Using the loan proceeds, the corporation
provides the participant a compensation bonus –
Section 162.
 This is a tax deductible expense for the corporation.
 The corporation sends the bonused compensation to a
life insurance company.
 The insurance contract is typically a whole life
policy.
 The policy is owned immediately by the
participant.
 The company retains no ownership of the policy.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 4: The participant has a tax liability on the
full premium. A portion of the annual premium may
be surrendered – not borrowed, to pay for the
participant’s tax liability.
 The portion of the premium being surrendered
comes from a paid up additions rider.
 Thereby giving the participant a policy with
immediate cash values, at ‘no out of pocket cost’.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 5: The corporation is assessed an interest
charge for the margin loan – which is a second
tax deductible expense.
 The corporation is using the borrowed money for
compensation – not to purchase a life
insurance policy.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 6: At the specified retirement age, or a
specified date of distribution, a percentage of the
net asset value of the investment account is
distributed to the participant as supplemental
retirement income.
 This is a tax deductible business expense
for the corporation.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
STEP 7: In addition to the life insurance death
benefit, the life insurance contract can be used to
supplement retirement income on a tax favored
basis.
 As long as the policy is not surrendered, cash
values can be taken against basis or as a loan with
no income tax due.
For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan provides
the Corporation with:
 Current and deferred tax deductions
which can exceed the Corporate
contributions
 No limits on contributions
 Full control of plan assets owned by the
Corporation — AT ALL TIMES!
 No IRS filings or approvals
 Ability to stop plan if necessary
 Ability to choose participants
 Retaining Key People — Golden
handcuffs
For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan provides
the Plan Participant with:
 Two streams of income either at
retirement or a specific date
 Participant has immediate ownership of
life insurance policy
 No penalties for early distributions from
the investment account
 May provide supplemental income in the
event of disability
 No ‘out of pocket’ cost to participant
For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan
will work in:
 C Corporations
 S Corporations
 Partnerships
 LLC’s*
*That are taxed only as a C-Corp, S-Corp, or
Partnership
For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan
prospects:
Corporate clients who are:
 Established
 Financially Healthy
 Looking for additional tax deductions
 Want to provide an additional plan on a
selective basis – even if it is just the owner
 Need to Customize a plan to fit its’ needs
 Avoid the heavy cost of traditional NQ plans
For Financial Professional Use Only. Revised 12/9/15 HCB00152
The Dolgoff Plan has been
successfully used for:
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Business Succession Planning
Supplemental/Retirement Income
Retain Key People
Buy/Sell Agreement funding
Estate Planning
Charitable Giving
For Financial Professional Use Only. Revised 12/9/15 HCB00152
Questions?
For Financial Professional Use Only. Revised 12/9/15 HCB00152