MaxCap is Baycrest Consultants proprietary compensation strategy that leverages a Collateral Assignment Split Dollar (CASD) arrangement to provide long-term, tax-advantaged supplemental benefits to nonprofit executives. In this structure, the nonprofit funds premiums on a life insurance policy owned by the executive (or an irrevocable trust), and the nonprofit’s interest is secured via a collateral assignment. Upon exit or retirement, the policy’s cash value and death benefit create significant wealth, while the organization recoups its contributions.

MaxCap is a proprietary compensation program that leverages life insurance arrangements to provide tax-advantaged supplemental benefits. The name reflects its purpose of maximizing compensation and benefits for participants.

A 5-year commitment is required to optimize the growth potential of the investment and ensure that it becomes effective in generating significant benefits over time.

No, you do not have to put the same amount in each year. The plan typically allows for
flexible contributions based on individual circumstances.

The policy typically allows for a withdrawal of up to 60% of the cash value, although adjustments based on individual contract specifics may be possible.

If you quit or are terminated, you will still be responsible for any remaining premium payments and loan repayments. The specifics of your situation may affect the continuity of the policy.

If an employee leaves before the 5-year commitment, they may still have responsibilities related to premium payments, and the tax consequences of any loan forgiveness would apply.

Yes, the plan is generally portable. The employee can retain the policy by repaying any associated loans, and negotiations can be made regarding collateral assignments with the new employer.

If the company decides to discontinue the program after 3 years, specific terms regarding policy continuation or contribution adjustments can be discussed to ensure the best outcome for employees and the organization.

The investment within the insurance policy grows over time, and you can access the accumulated cash value during the established distribution phase without any withdrawals until that point.

Yes, the MaxCap program utilizes a life insurance policy, typically an Indexed Universal Life (IUL) or a similar type of policy to ensure effective cash growth and benefits.

The employee owns the insurance policy while the employer holds a collateral assignment on it until any outstanding loans are repaid.

The specific insurance company may vary based on the chosen policy. Baycrest Consultants works with reputable carriers, but specifics would be provided during enrollment.

Acumen is in Boston, MA and has been in business for 15 years. This information can be confirmed directly through their website or corporate documents.

Yes, the investment within the life insurance policy grows, typically on a tax-deferred basis, enhancing its cash value and potential payout.

The employer is repaid through the policy's cash value upon the employee's departure or from the death benefit, as determined in the terms of the collateral assignment agreement.

Generally, the employer cannot access the loaned funds before the stipulated 15 years unless alternative arrangements are made.

MaxCap complies with IRS Final Split-Dollar Regulations (Treas. Reg. §1.61-22), treating the arrangement as a loan regime. When structured properly, with market-rate interest and proper documentation, the plan is fully compliant and defensible under scrutiny, particularly with nonprofit-specific rules around reasonable compensation.

Generally, the employer cannot access the loaned funds before the stipulated 15 years unless alternative arrangements are made.

The IRS treats the MaxCap program as compliant with specific regulations regarding split-dollar arrangements, provided it is properly structured and documented.