The tax laws continue to tighten, and business risks continue to grow. Finding solutions that keep companies compliant while maximizing tax efficiency is now a necessity.
For over two decades, Ken Crabb has answered that need. He is an experienced tax planning strategist with a background in economics and corporate finance. Ken is widely recognized for one powerful creation: the Restricted Property Trust (RPT).
Crabb began his journey in the financial services industry over 25 years ago, serving as Vice President of a securities corporation and developing complex insurance-based solutions for business transactions and estate planning. His experience revealed a gap in the market: business owners needed a tax strategy that was effective, ethical, and defensible.
In 2000, Crabb partnered with a Cleveland-based tax law firm to design exactly that. The result was the Restricted Property Trust, a plan built to balance IRS requirements with conservative tax advantages in a way that few solutions ever have.
His goal was to create a conservative and non-abusive plan that business owners could trust for the long term. That goal shaped the RPT’s structure and helped it withstand scrutiny from the IRS in 2007, emerging as a recognized and legitimate tax strategy.
The Restricted Property Trust Explained
The Restricted Property Trust is an employer-sponsored plan designed for business owners and executives who want to reduce taxable income while building long-term wealth. It combines regulatory compliance with conservative tax optimization, which are two goals that are often at odds.
- Tax-Deductible Contributions: Every annual contribution to the RPT is fully deductible by the employer.
- Tax-Deferred Growth: Assets grow inside the cash value of a life insurance policy, free from annual income tax.
- Tax-Advantaged Distribution: When the plan ends, the policy is distributed, and only part of its cash value is taxable.
- Death Benefit Security: The plan provides a death benefit, offering business continuity and estate planning advantages.
One of the most important features is the “risk of forfeiture” provision. If the employer fails to make contributions during the restricted period, the policy lapses, and the surrender proceeds go to a preselected charity. This requirement is a huge reason why the IRS recognizes the plan’s legitimacy.
The RPT’s flexibility is another advantage. Participation isn’t limited by the usual restrictions that come with qualified plans. Anyone with earned income can join, and contribution levels are set individually.
Why the Market Needs the RPT Now
Tax laws grow more complex every year, and businesses face increasing pressure to comply while still protecting profits. The Restricted Property Trust provides a model that has:
- Regulatory Confidence: Its compliance-driven design, including the risk-of-forfeiture rule, ensures it stands up to IRS scrutiny.
- Enhanced Wealth Accumulation: Compared to alternative investments earning 7%, an RPT can generate better long-term results.
- Business Continuity: The built-in life insurance component protects companies from disruption in the event of a key executive’s death.
- No Impact on Qualified Plans: Contributions to an RPT don’t affect existing retirement plans, giving business owners added flexibility.
- Control and Customization: Each participant sets their own contribution level, making it ideal for both seasoned entrepreneurs and new business owners.
The current economic environment further highlights the RPT’s importance. High-income individuals and business owners are looking for ways to preserve capital while complying with evolving tax regulations. Traditional qualified plans often fall short due to contribution limits and mandatory testing. The RPT sidesteps those issues while still delivering strong tax advantages.
Conclusion
Ken Crabb’s work with the Restricted Property Trust has reshaped how business owners think about tax planning. It began as an idea to address a compliance issue and has evolved into a trusted financial solution that serves companies nationwide. Its success in withstanding IRS challenges in 2007 speaks volumes about its design and credibility.
The Restricted Property Trust is a bridge between compliance and growth. The IRS is more vigilant than ever, and business owners are under pressure to protect their earnings. Ken Crabb’s solution delivers a path forward that’s both conservative and defensible.
Are you seeking to optimize taxes, grow wealth, and safeguard your business’s future? The RPT is a proven solution. As Crabb’s work shows, the smartest financial strategies don’t fight the rules… they master them.
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