What Your Advisors Don't Know to Ask

How Curated PPLI Unlocks What Traditional Planning Misses

bv Brad Barros, Co-founder & President, Specialty Assurance Group, Ltd

Most family offices don't realize they have a problem until they're facing it. It's not uncommon for an entrepreneur preparing to sell a 9-figure business to discover that conventional exit planning strategies—even creative ones—leave tens of millions on the table. It's not that an advisor's exit planning tools don't work, but rather that the advisor's inquiry never went deep enough.

So, what does a deeper inquiry reveal?

Since 1998, ultra-high-net-worth families working with leading law firms have quietly deployed a planning approach that most advisors either don't know exists or don't believe is possible: private placement variable universal life insurance (PPLI) funded with non-cash assets. These customized policies accept in-kind contributions of carried interest, GP and LP interests, private equity positions, real property, hedge funds, cryptocurrency, intellectual property, artwork, aircraft, and qualifying majority-owned entities[1]—creating exit planning opportunities that become visible only when you ask different questions.

The Knowledge Gap

Family offices routinely overlook a fundamental capability: life insurance companies serving high-net-worth clients readily accept interests in private business entities and real estate holding companies as premium payments. These "in-kind" or non-cash premiums become part of the policy's cash value and receive the same tax treatment as other compliant policy assets[2][3].

Most carriers—including those offering "off-the-shelf" PPLI products—don't accept these asset types. Their business model relies on assets under management and traditional investment products, from which they earn fees. Non-bankable assets like carried interest, operating businesses, or intellectual property generate no ongoing revenue for conventional carriers, making these transactions economically unattractive regardless of their value to clients.

This oversight isn't surprising. The bespoke PPLI marketplace is deliberately finite—a handful of sophisticated advisors working closely with national law firms, not the typical insurance distribution channel. Standard policies cost under 50 basis points annually and are commission-free, fee-based structures.

What becomes possible:

• Tax-advantaged investment growth

• Tax-free access to funds through withdrawals up to cost basis and low-cost policy loans

• Income tax-free death benefits

• Investment management and mortality costs paid with pre-tax policy earnings

• Structure that typically excludes estate tax

• Statutory asset protection

The National Association of Insurance Commissioners acknowledges this long-standing acceptance of in-kind assets for both casualty and life insurance, deliberately avoiding narrow definitions that would constrain legitimate planning[4].

When Discovery Reveals What Planning Missed

The Situation

Donny Donnelly, 55, built a nationwide donut retail chain worth 9-figures. He's a California resident in the top marginal tax bracket. His estate planning attorney, Julia, recognized two problems:

First, the sale would trigger tens of millions in federal and state taxes. Second, if Donny died before selling, the business value could stagnate or collapse, devastating both his family and franchisees.

Traditional planning would address these challenges separately and still leave money on the table. Julia's inquiry went deeper, enabling her to see a different structure entirely.

The Framework

Phase 1: Create the structure

Donny established a Grantor Trust with an independent trustee, which became the applicant, owner, and beneficiary of a curated PPLI policy with a significant death benefit, supporting Donny's estate planning and philanthropic objectives. The trust was funded using Donny's estate and gift tax exemption. The policy featured a customized investment account with an independent Manager nominated by Donny, operating under an investment policy aligned with Donny's risk tolerance and timeline—but with investment discretion residing solely with the Manager.

Critically, the trustee could borrow up to 92% of policy values tax-free at any time.

Phase 2: Transfer the opportunity

Working with the valuation firm and estate planning counsel, Julia structured a method to transfer the business's future appreciation into the policy at today's conservatively discounted valuation—long before a sale occurred or a specific buyer was even contemplated. This allowed for possible substantial gains between the current discounted valuation of the business and an eventual sale to be earned inside the policy as an investment gain, receiving the same tax-advantaged treatment as other compliant policy assets[5].

Phase 3: The outcome

Five years later, Donny sold his company for $250 million. Nearly all of the appreciation above the conservative valuation was earned inside the policy—subject to ongoing compliance with diversification requirements, investor control doctrine, and policy governance that professionals experienced in advanced PPLI routinely maintain.

Why This Matters for Family Offices

This isn't just about life insurance. It's about recognizing when conventional inquiry stops short of unconventional solutions.

Exit planning represents just one application. The same discovery-driven approach reveals opportunities in intergenerational estate planning where traditional structures create unnecessary tax friction, multinational planning for families navigating multiple tax jurisdictions, and sophisticated M&A transactions where timing and liquidity constraints limit conventional options. In each case, curated PPLI becomes visible only when advisors ask: what outcome matters most, and what constraints make traditional solutions inadequate?

When families face oversized problems—often eight figures or more—or anticipate similar future events, the question isn't "what products exist?" but "what outcome do you seek to protect, enhance, or exponentialize?" What keeps you awake at 2am?

Armed with that clarity, the right advisor becomes obvious.

The advisors who can execute curated PPLI with in-kind premiums represent a finite group of specialists with deep expertise in policy design, investment diversification, adherence to the Investor Control Doctrine, valuation of non-bankable assets, and efficiently priced mortality coverage. They work collaboratively with family office teams to model possible outcomes and confirm whether any given strategy genuinely serves the client—not the transaction.

Family office members seeking to evaluate these planning opportunities should look for advisors whose compensation aligns with the family's outcome rather than product placement, who prioritize discovery over deployment, who are as willing to conclude "no" as "yes," and who have the technical acumen and professional partnerships to ensure long-term compliant and sustainable execution across generations.

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[1]: See example PLR 8427085; PLR 201436005; PLR 201240018; PLR 200915006; PLR 9433030; PLR 8427091; Rev. Rul. 82-55; Rev. Rul. 82-54, and Rev. Rul. 2003-91.

[2]: See IRC Section 7702(f)(1).

[3]: See PLR 202041005 (July 13, 2020) accepting a life insurance company as the owner of real estate and operating partnership where the investment strategy is sufficiently broad and there is no agreement between the insurer and the policyholders as to what assets in the cash value may be bought or sold). The ruling is nonpublished and of no precedential value.

[4]: These include the following publications and model regulations issued by the NAIC including: (i) Variable Insurance Model Regulation MDL-270; (ii) Variable Annuity Model Regulation MDL-250; (iii) Model Variable Contract Law MDL-260; (iv) Life and Health Insurance Policy Language Simplification Model Act MDL-575; (viii) Universal Life Insurance Model Regulation MDL-585; (viii) Annuity Nonforfeiture Model Regulation MDL-806; (ix) Standard Nonforfeiture Law for Life Insurance MDL-808; and (x) Valuation of Life Insurance Policies Model Regulation MDL-830.

[5]: A compliant transaction requires tax and regulatory guidance. Clients should seek assistance from independent tax counsel.

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About the Author

Brad Barros, Co-founder & President

Specialty Assurance Group, Ltd

Brad Barros is the co-founder and President of Specialty Assurance Group, Ltd., a modern PPLI insurance company that accepts in-kind premiums. Brad is the co-founder and Director at Specialty Wealth Advisory, LLC, a leading firm in advanced PPLI policy design. He serves as the Strategic Expert on PPLI for the Los Angeles Consulting Group (LACG) and is a faculty member at the Exit Planning Institute.  

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