A GSD agreement (grantor split-dollar or private split-dollar) documents a split-dollar life insurance arrangement between a grantor (or family entity) and an irrevocable life insurance trust(ILIT). The agreement specifies the regulatory regime-loan or economic-benefit-premium flows,collateral or assignments, and how death benefit or cash value is allocated and repaid. Properly Structured, a GSD can finance large premiums for wealth-transfer policies while minimizing gifts and preserving estate-planning control.

Families use private split-dollar to finance large ILIT premiums. Advisors choose loan or economic-benefit regime, set collateral or assignments, and document exit strategies (rollout,repayment, or transfer) consistent with tax guidance.