The New Era of Wealth Transfer Planning #1. American Taxpayer Relief Act Boosts Life Insurance. For agent use only. Not for public distribution.

Size: px
Start display at page:

Download "The New Era of Wealth Transfer Planning #1. American Taxpayer Relief Act Boosts Life Insurance. For agent use only. Not for public distribution."

Transcription

1 The New Era of Wealth Transfer Planning #1 American Taxpayer Relief Act Boosts Life Insurance For agent use only. Not for public distribution.

2 In January 2013 Congress stepped back from the fiscal cliff and passed The American Taxpayer Relief Act of 2012 ( ATRA or the Act ). The Act answered questions about the Bush tax cuts by making most of them permanent.* Many people and organizations have published good summaries of the Act s provisions. This brochure focuses on how it impacts life insurance and wealth transfer opportunities. Life Insurance Income Taxation Unchanged Over the years Congress has granted life insurance policies a unique combination of valuable income tax benefits. Whenever politicians talk about increasing taxes and raising revenue, there is always concern that some of life insurance s tax benefits may be reduced. Fortunately, the Act makes no changes in how life insurance policies are taxed. Income tax-free death benefits, tax-deferred cash value growth, 1035 exchanges, and the taxation of cash value distributions all remain the same under federal tax laws. New Income Tax Rates for High Income Taxpayers The Act left income tax rates unchanged for all taxpayers except those with large taxable incomes. Single taxpayers earning more than $400,000 and married couples filing jointly earning more than $450,000 will be subject to a marginal rate of 39.6% on the portion of their income which exceeds these limits. The Act also increases tax rates on capital gains and dividend income to 20% for these high income taxpayers. Transfer Tax Rules Made Permanent* The Act ends the twelve years of regular change and uncertainty on the taxation of wealth transfers during life and at death. It retains the concept of unification of the gift, estate and generation skipping transfer (GST) taxes by setting their top marginal rates at 40% and establishing their 2013 exemptions at $5,250,000 (which will be adjusted annually for inflation). The Act provision that adjusts these exemptions annually for inflation is important because it gives these exemptions the potential to keep growing year after year. The Act also simplifies wealth transfer planning for married couples by making permanent the portability of the estate tax exemption to a surviving spouse. *Note on Permanent : Many of the provisions of ATRA are considered permanent enactments. This does not mean that these provisions cannot be changed by Congress in the future (even this year). To designate a provision as permanent indicates only that the provision will not expire unless Congress acts to change it. The Transfer Tax Landscape in 2013 Now that the phase-ins, phase-outs and sunsets have ended, 2013 may be the beginning of a new era in wealth transfer planning. Legal and tax advisors retained all their planning tools and now they have increasing exemptions with which to use them: Lifetime Gifts** Annual Exclusion Gift Limit $14,000 annually to each donee Lifetime Gift Tax Exemption $5,250,000 GST Tax Exemption on Gifts $5,250,000 Transfers At Death*** Estate Tax Exclusion $5,250,000 GST Tax Exemption on Death Transfers $5,250,000 ** Married couples can work together to combine their gift tax annual exclusions and lifetime gift tax exemptions through coordinated separate actions or through split gifts under IRC Section *** Married couples may use the portability feature of the Act to defer use of the estate tax exemption of the first spouse to die until the death of the surviving spouse. 1 For agent use only. Not for public distribution.

3 General Impact on Wealth Transfer Planning The Act simplifies wealth transfer planning in several important ways: It reduces the number of people who need to plan and position their assets to avoid federal estate and GST taxes. Establishing the gift, estate and GST tax exemptions at over $5,000,000 per person and indexing them annually for inflation likely means that less than 1% of estates will be subject to federal estate taxes. With inflation indexing, these exemptions will keep growing year after year. As a result, only the very wealthy (currently individuals with estates over $5.25 million and married couples with estates in excess of $10.5 million) will have federal estate tax problems. Making portability of estate tax exemptions between spouses permanent could change how many married couples decide to transfer their wealth. Permanent portability could greatly simplify planning for wealth transfers between spouses. When a federal estate tax return is filed at the first spouse s death, the surviving spouse will be able to use two estate tax exemptions instead of one. As a result, married couples shouldn t need to divide up their assets to make sure each has enough to use their individual exemptions. When portability is used, the order of spouses death is irrelevant for estate tax purposes. Both exemptions can potentially be used regardless of which spouse dies first. 3. The Act reinforced opportunities to transfer wealth by making large gifts. By indexing the lifetime gift tax exemption for inflation, taxpayers will have new and recurring opportunities to make large gifts (even those who may have maxed out their gift tax exemptions in previous years). Because of these changes, many attorneys could change how they draft wills, revocable trusts and other wealth transfer documents for married couples. Portable estate tax exemptions allow married spouses the convenience of full use of the marital deduction without any increase in estate taxes. Consequently, the need for credit shelter trusts (also known as bypass trusts and family trusts) may be significantly reduced. Instead, more people may use so-called I Love You plans in which the first spouse leaves everything to the surviving spouse. If a spouse wants to limit the amount of control a surviving spouse has over estate assets, he/she could use any of the different marital trusts, including Qualified Terminal Interest Property (QTIP) trusts. The potential simplicity and relative ease of using portability will change how many married couples implement their wealth transfer plans. Portability could allow these couples to postpone some difficult decisions about distributing assets until the second spouse s death. Many couples could benefit from a review of their current wills, revocable trusts, beneficiary designations and other wealth transfer documents to see if portability will help them meet their wealth transfer goals. For agent use only. Not for public distribution. 2

4 General Impact on Income Tax Planning The Act s increase in income taxes on high income taxpayers coupled with the 3.8% increase in taxes on investment income under the Affordable Health Care Act may also have a significant impact. Many high income taxpayers may be interested in strategies to offset their tax increases. 1. They may be open to changing the makeup of their asset portfolio and decide to shift some of their holdings into assets with the potential to provide taxdeferred growth but won t generate current taxable income. Cash value life insurance is an asset with this potential. High income people who also have a need for death benefits may wish to use life insurance to warehouse funds that they don t expect to need in the near future. Life insurance cash values have the potential to grow in value over time. Long-term irrevocable trusts might also benefit from using cash value life insurance to reduce income tax exposure. Trusts that don t distribute their income annually are taxed at a 39.6% rate on all taxable income in excess of $11,800. When an insurable interest is present, cash value life insurance could help reduce the impact of income taxes on these trusts. Impact on Life Insurance Life insurance comes through the Act unchanged. It continues to offer protection against potential financial problems caused by an insured s death. Over the years life insurance has been very effective in helping people accomplish important financial objectives, including: 1. Replacing future earnings that could be lost through premature death. 2. Solving equalization problems arising when assets won t be divided equally. 3. Serving as a source for supplemental retirement income. 4. Providing liquidity to pay estate settlement costs and expenses. 5. Transferring wealth at death. The Act does not change the ability of life insurance to accomplish any of these important financial goals. In fact, the market for four of these five uses of life insurance remains unchanged. The only use of life insurance negatively impacted by the Act is the estate liquidity market (#4 on the list above) and only part of that market has been hurt by the new wealth transfer tax rules Income tax savings could become an incentive for lifetime gifts. High income taxpayers could elect to make gifts of income-producing assets to children and grandchildren who are in lower income tax brackets than the donor. Income from the gifted assets could avoid both the new 3.8% tax on investment income and the 39.6% marginal income tax bracket as long as the child/grandchild s taxable income stays below the $400,000-$450,000 threshold. There is another potential income tax advantage from using portability at the first spouse s death. That advantage is a possible double step up in basis. Many assets in the first spouse s taxable estate will be eligible for a step up in basis. Any of those assets still owned by the surviving spouse could receive another step up in basis at the spouse s death. For example, suppose a husband has $1,000,000 in IBM stock when he dies which he acquired for $500,000. At his death under the terms of his will the IBM stock goes to his wife. She takes it with a stepped up basis to $1,000,000. If the stock has grown in value to $2,000,000 and she still owns it at her death, her heirs will get another step up in basis to $2,000,000. They could sell it immediately and avoid capital gains tax on all the stock s growth. 3 For agent use only. Not for public distribution.

5 Life Insurance and Estate Liquidity A portable and inflation-indexed estate tax exemption of $5.25 million per person ($10.5 million per married couple) will likely reduce the number of people who will have federal estate tax concerns. And, lowering the maximum estate tax rate to 40% reduces how much federal estate tax will be due from the few taxpayers with taxable estates in excess of the exemption. (Estates of decedents residing in the twenty states that have estate/inheritance taxes will still need liquidity to pay those taxes.) The bottom line here is that only people with very large estates will need to plan for federal estate taxes. As a result, there will likely be fewer opportunities to sell life insurance for federal estate tax liquidity. Although fewer people will need to pay federal estate taxes, many will still have significant liquidity needs at death. Life insurance death benefits can still provide funds for a number of death-related liquidity needs, including: State estate/ inheritance taxes Income tax liabilities Nursing home costs Estate administration expenses Cash bequests Debts Funeral expenses Medical expenses Property management fees Charitable bequests Change in Marketing to Part of the High Net Worth Market The increase in exemption limits should change how life insurance is sold to the segment of the high net worth market that no longer has a federal estate tax problem. Even though they may not need as much estate liquidity, they may still enjoy significant benefits from using life insurance. Financial advisors will simply need to discuss life insurance in a different way. They will need to design their presentations to demonstrate how life insurance can help them meet their wealth transfer objectives more easily and efficiently. Why Life Insurance May Be a Useful Wealth Transfer Tool Over the years many high net worth people have used life insurance to accomplish many different goals. With their tax and legal advisors, they ve adopted customized plans to pass on their wealth. Although many different financial products and strategies are available to them, when they are in good health they often use life insurance in their planning. Why? Because life insurance offers them a unique combination of potential advantages: Predictable Value A policy can be structured to pay a known death benefit amount when the insured dies. Death Benefit Value Not Linked to Market Performance A policy may be structured so that the death benefit is a fixed amount which is known in advance. Liquidity Death benefits are paid in cash when the insured dies; generally no taxes, costs, commissions or fees are subtracted. Growth / Leverage Policy death benefits (including the amount in excess of premiums) are generally federal income tax free under IRC Section 101. Federal Income Tax Free Payment Death benefits may be structured to be paid directly to the beneficiaries (or a trust for their benefit) without the costs and delays that often impact assets distributed through probate. Avoids Probate Death benefits may be structured to be paid directly to the beneficiaries (or a trust for their benefit) without the costs and delays that often impact assets distributed through probate. For agent use only. Not for public distribution. 4

6 Most high net worth people and their advisors are careful people. They didn t build their fortunes by being reckless. Many don t need to make more money. Often it s more important to them to protect what they have. Consequently, they are usually interested in products and strategies that offer protection and minimize risk. Before they act, they carefully analyze available alternatives and the potential risks associated with them. Every financial product and strategy has an element of risk. Life insurance is no different. However, when properly designed and implemented, policies issued by financially strong insurance companies can be reliable financial tools. Although results will vary with a variety of factors, when premiums are paid in a timely manner and the policy is well managed, life insurance can provide a reasonable rate of return through life expectancy. An internal rate of return analysis can help show the financial benefits a life insurance policy has the potential to deliver. The changes The American Taxpayer Relief Act makes in the federal estate tax could actually make it easier for some high net worth people to benefit from using life insurance. People who don t have a federal estate tax problem may not need an ILIT to own the policy; instead, they may be able to own the policy themselves. Personal ownership makes life insurance more attractive and easier to use in several ways: Eliminates Extra Costs When you can own your policy yourself, you don t need to pay an attorney to draft an ILIT and you don t have to pay a trustee to administer it. Easier to Pay Premiums Gifts or loans to supply premium dollars to a trustee aren t needed; Crummey withdrawal powers aren t a problem. Insureds can pay their premiums directly to the insurance company. Privacy Owning a policy personally means no one else has to know about it; there are no trustees or trust beneficiaries with a right to know about the policy or to ask questions about it. Control When you own your own policy, you maintain full control; within the limits of the policy you can exercise all policy rights, including changing the death benefit, premiums, primary and contingent beneficiaries, 1035 exchanges, etc. Unlike ILIT ownership, you can manage the policy to fit your needs and make adjustments whenever you wish. If you wish to control how policy benefits are delivered to family members, you can create a trust in your will and name it the policy beneficiary. And you can retain the ability to change the terms of the trust as long as you live. 5 For agent use only. Not for public distribution.

7 Conclusion The American Taxpayer Relief Act is good news for life insurance! It doesn t change any of the advantages life insurance policies have enjoyed or the ways in which it can help clients accomplish their financial goals. In addition, it opens up new opportunities for high income and high net worth people to use life insurance. Although some high net worth people may not need as much life insurance for estate tax liquidity, the increased gift, estate and GST tax exemptions make life insurance easier to use. The opportunity for some to own policies personally without increasing their transfer taxes increases its attractiveness. The ability to retain control and privacy without the need to pay for complex trusts creates new sales opportunities. We ve entered a new era of wealth transfer planning. This is a great time to show high net worth people the many reasons they ll want to use life insurance as part of their legacy. For agent use only. Not for public distribution. 6

8 These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matters addressed in this document. Each taxpayer should seek advice from an independent tax advisor. The Voya Life Companies and their agents and representatives do not give tax or legal advice. This information is general in nature and not comprehensive, the applicable laws change frequently and the strategies suggested may not be suitable for everyone. Clients should seek advice from their tax and legal advisors regarding their individual situation. Life insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN), ReliaStar Life Insurance Company of New York (Woodbury, NY) and Security Life of Denver Insurance Company (Denver, CO). Within the state of New York, only ReliaStar Life Insurance Company of New York is admitted and its products issued. All are members of the Voya family of companies. Not FDIC/NCUA Insured Not A Deposit Of A Bank Not Bank Guaranteed May Lose Value Not Insured By Any Federal Government Agency For agent use only. Not for public distribution Voya Services Company. All rights reserved. CN /01/2014 Voya.com

Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance

Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance Passing on the Good Stuff! Implementing a Roth IRA Conversion Using Life Insurance Passing On The Good Stuff! All inheritances aren t equal. Even two different assets that are worth similar amounts may

More information

Generation Skipping Transfer Tax

Generation Skipping Transfer Tax Generation Skipping Transfer Tax Producer Guide For agent use only. Not for public distribution. Generation Skipping Transfer Tax Summary The generation skipping transfer (GST) tax is a complex tax. This

More information

10/23/2014. Life Insurance And The New Wealth Transfer Era. Disclosures. CHANGE The Never-Ending Force in Society

10/23/2014. Life Insurance And The New Wealth Transfer Era. Disclosures. CHANGE The Never-Ending Force in Society Life Insurance And The New Wealth Transfer Era Disclosures The Voya Life Companies and their agents and representatives do not give tax or legal advice. The strategies suggested may not be suitable for

More information

Life Insurance as an Asset Class:

Life Insurance as an Asset Class: Life Insurance as an Asset Class: A Predictable Asset for Unpredictable Times Producer Guide A Predictable Asset for Unpredictable Times Clients who have more money than they will spend will pass the excess

More information

Special Needs Children and Life Insurance

Special Needs Children and Life Insurance Special Needs Children and Life Insurance When we became parents our worlds changed in ways we never imagined. We took on new obligations and responsibilities. Our responsibilities and worries change as

More information

Life Insurance as an Asset Class: A Predictable Asset for Unpredictable Times

Life Insurance as an Asset Class: A Predictable Asset for Unpredictable Times Life Insurance as an Asset Class: A Predictable Asset for Unpredictable Times This material is not intended to be used to avoid tax penalties. It was prepared to support the promotion or marketing of the

More information

Shared Dollar Life Insurance: Insuring Adult Children to Build Retirement Funds

Shared Dollar Life Insurance: Insuring Adult Children to Build Retirement Funds Shared Dollar Life Insurance: Insuring Adult Children to Build Retirement Funds What Will Retirement Look Like for Our Children? If you are like most working people, from time to time you think about retiring.

More information

Partner s Lifetime Access Trust. A Gifting Strategy for Unmarried Partners

Partner s Lifetime Access Trust. A Gifting Strategy for Unmarried Partners Partner s Lifetime Access Trust A Gifting Strategy for Unmarried Partners The Dilemma of Large Gifts You may be thinking about making a large gift to benefit your partner, your children or grandchildren

More information

Life Insurance: Your blueprint for Wealth Transfer Planning. Private Financing Producer Guide. For agent use only. Not for public distribution.

Life Insurance: Your blueprint for Wealth Transfer Planning. Private Financing Producer Guide. For agent use only. Not for public distribution. Life Insurance: Your blueprint for Wealth Transfer Planning Private Financing Producer Guide Private Financing Most people don t object to owning life insurance, they just object to paying the premiums.

More information

Spousal Access Trusts Access To Cash Value Potential Through Flexible Trust Planning

Spousal Access Trusts Access To Cash Value Potential Through Flexible Trust Planning SALES STRATEGY Guiding you through life. ESTATE PLANNING Spousal Access Trusts Access To Cash Value Potential Through Flexible Trust Planning The Concerns Many clients who are concerned about maximizing

More information

Life Insurance Capacity Calculator. Producer Guide. For agent use only. Not for public distribution.

Life Insurance Capacity Calculator. Producer Guide. For agent use only. Not for public distribution. Life Insurance Capacity Calculator Producer Guide What is a Life Insurance Capacity Calculator? The Voya TM Life Companies Life Insurance Capacity (LIC) Calculator is a life insurance sales tool which

More information

Life Insurance in Qualified Plans. Producer Guide. For agent use only. Not for public distribution.

Life Insurance in Qualified Plans. Producer Guide. For agent use only. Not for public distribution. Life Insurance in Qualified Plans Producer Guide For agent use only. Not for public distribution. Life Insurance In Qualified Plans While qualified plans are a tremendous retirement savings vehicle, they

More information

Making life work for estate planning

Making life work for estate planning Life insurance opportunities Making life work for estate planning Financial professional s guide m A Securian Company The Tax Relief Act of 2010 significantly changed the federal transfer tax system, including

More information

Essentials of Estate Planning

Essentials of Estate Planning Essentials of Estate Planning LIFE INSURANCE These materials are not intended to be used to avoid tax penalties, and were prepared to support the promotion or marketing of the matter addressed in this

More information

Life Insurance: A Multi-Purpose Wealth Management Tool

Life Insurance: A Multi-Purpose Wealth Management Tool Life Insurance: A Multi-Purpose Wealth Management Tool These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion or marketing of the matter addressed

More information

Sales Strategy Estate Planning for Non-Citizens in the United States

Sales Strategy Estate Planning for Non-Citizens in the United States Sales Strategy Estate Planning for Non-Citizens in the United States SINGLE LIFE SPOUSAL ACCESS TRUST: A LIFE INSURANCE ALTERNATIVE As large numbers of people from other countries settle in the United

More information

Estate Planning. And The Second To Die Program. www.infarmbureau.com

Estate Planning. And The Second To Die Program. www.infarmbureau.com Estate Planning And The Second To Die Program www.infarmbureau.com Estate Planning and the Second to Die Program from Indiana Farm Bureau Insurance A source of satisfaction for most married couples is

More information

Advanced Markets Estate Planning for Non-Citizens in the United States

Advanced Markets Estate Planning for Non-Citizens in the United States Estate Planning for Non-Citizens in the United States SINGLE LIFE SPOUSAL ACCESS TRUSTS: A LIFE INSURANCE ALTERNATIVE As large numbers of people from other countries settle in the United States (U.S.),

More information

Life Insurance: Your Blueprint for Wealth Transfer Planning

Life Insurance: Your Blueprint for Wealth Transfer Planning Life Insurance: Your Blueprint for Wealth Transfer Planning Premium Financing Premium Financing You ve worked hard to earn financial success, and along the way you ve also gained some wisdom in financial

More information

Executive Bonus Arrangements using Life Insurance. Producer Guide. For agent use only. Not for public distribution.

Executive Bonus Arrangements using Life Insurance. Producer Guide. For agent use only. Not for public distribution. Executive Bonus Arrangements using Life Insurance Producer Guide For agent use only. Not for public distribution. Executive Bonus Arrangements using Life Insurance To remain competitive and profitable,

More information

Business Owner s Bonus Plan. Producer Guide. For agent/registered representative use only. Not for public distribution.

Business Owner s Bonus Plan. Producer Guide. For agent/registered representative use only. Not for public distribution. Business Owner s Bonus Plan Producer Guide For agent/registered representative use only. Not for public distribution. Business Owner s Bonus Plan Producer Guide The Business Owner s Bonus Plan is a personally

More information

Executive Benefits for Nonprofit & Tax-Exempt Organizations

Executive Benefits for Nonprofit & Tax-Exempt Organizations Executive Benefits for Nonprofit & Tax-Exempt Organizations Recruit, Retain, and Reward Your Top Talent with Nonqualified Retirement or Estate Planning Benefits As a nonprofit or tax-exempt organization,

More information

Managing mortality risk with life insurance diversification

Managing mortality risk with life insurance diversification Managing mortality risk with life insurance diversification Diversification is an important strategy for mitigating investment loss by selectively combining noncorrelated assets in an investment portfolio.

More information

Estate Tax Concepts. for Edward and Tina Collins

Estate Tax Concepts. for Edward and Tina Collins Estate Tax Concepts for Edward and Tina Collins Joseph Davis, CLU, ChFC 215 Broad Street Charlotte, North Carolina 26292 Phone: 704-927-5555 Mobile Phone: 704-549-5555 Fax: 704-549-6666 Email: joseph.davis@aol.com

More information

Planning your estate

Planning your estate Planning your estate A general guide to estate planning Policies issued by: American General Life Insurance Company The United States Life Insurance Company in the City of New York What is estate planning?

More information

IMC White Paper Life Insurance Planning Under the American Taxpayer Relief Act (H.R. 8)

IMC White Paper Life Insurance Planning Under the American Taxpayer Relief Act (H.R. 8) 1 IMC White Paper Life Insurance Planning Under the American Taxpayer Relief Act (H.R. 8) Synopsis: On the verge of the fiscal cliff, the president signed into law the American Taxpayer Relief Act of 2012

More information

Wealthiest Families Know: 2013 & Beyond

Wealthiest Families Know: 2013 & Beyond What the Wealthiest Families Know: 2013 & Beyond Determine How Estate Planning Strategies and Life Insurance May Help You Turn Your Goals into a Wealth Legacy Whether you acquired it or inherited it, wealth

More information

Estate planning strategies using life insurance in a trust Options for handling distributions, rollovers and conversions

Estate planning strategies using life insurance in a trust Options for handling distributions, rollovers and conversions Estate planning strategies using life insurance in a trust Options for handling distributions, rollovers and conversions Life s better when we re connected Table of contents Find your questions review

More information

Life Insurance As An Asset Class Consumer Presentation

Life Insurance As An Asset Class Consumer Presentation Life Insurance As An Asset Class Consumer Presentation Brought to you by: Pinney Insurance Center, Inc. 2266 Lava Ridge Court Roseville, CA 95661 www.pinneyinsurance.com Life Insurance As An Asset Class

More information

The Perils and Prospects of Portability

The Perils and Prospects of Portability Gift and Estate Tax Planning Insights The Perils and Prospects of Portability Jeffrey M. Cheyne, Esq. With the passage of federal tax relief laws in recent years, the porting of unused federal estate tax

More information

Sales Strategy Sale to a Grantor Trust (SAGT)

Sales Strategy Sale to a Grantor Trust (SAGT) Estate planners have been using the Irrevocable Life Insurance Trust (ILIT) for many years, to increase wealth and liquidity outside the taxable estate. 1 However, transfers to ILITs One effective technique

More information

Estate Planning Basics. An Overview of the Estate Planning Process

Estate Planning Basics. An Overview of the Estate Planning Process Estate Planning Basics An Overview of the Estate Planning Process What Is an Estate Plan? An estate plan is a map This map reflects the way you want your personal and financial affairs to be handled in

More information

Common mistakes in estate planning

Common mistakes in estate planning Common mistakes in estate planning Disclaimers The Lyon Group is not in the business of providing tax, legal or accounting advice, and none is intended nor should be inferred from the foregoing comments

More information

13 FINANCIAL PLANNING STRATEGIES FOR 2013

13 FINANCIAL PLANNING STRATEGIES FOR 2013 13 FINANCIAL PLANNING STRATEGIES FOR 2013 Timely, actionable ideas following the American Taxpayer Relief Act KEY TAKEAWAYS With the passing of the American Taxpayer Relief Act of 2012 in reaction to the

More information

Maximizing Wealth Transfer using Innovative Trust Designs

Maximizing Wealth Transfer using Innovative Trust Designs Maximizing Wealth Transfer using Innovative Trust Designs For For Producer or or Broker/Dealer Use Use Only. Only. Not Not for for Public Distribution. Why Life Insurance? Provides for: Personal family

More information

Gift and estate planning: Opportunities abound

Gift and estate planning: Opportunities abound Gift and estate planning: Opportunities abound Vanguard research July 2013 Executive summary. Under federal gift and estate tax rules, individuals can potentially make significant gifts that are exempt

More information

Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com

Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com Law Offices of Robert J. Ross 1622 W. Colonial Parkway, Suite 201 (847) 358-5757 Inverness, Illinois 60067 Fax (847) 358-7088 Bob@RobertJRoss.com ESTATE PLANNING Estate planning is more than simply signing

More information

A Powerful Way to Plan: The Grantor Retained Annuity Trust

A Powerful Way to Plan: The Grantor Retained Annuity Trust Strategic Thinking A Powerful Way to Plan: The Grantor Retained Annuity Trust According to The Taxpayer Relief Act of 2010, the estate and gift exemption amount has been increased temporarily, for 2011

More information

No Better Time To Sell. Executive Benefits. For agent use only. Not for public distribution.

No Better Time To Sell. Executive Benefits. For agent use only. Not for public distribution. No Better Time To Sell Executive Benefits Key employees are many businesses most valuable assets. This is a great time to talk with business owners about life insurance-funded executive benefits for their

More information

Ways to Remember Minnesota Veterinary Medical Foundation In Your Estate Plan

Ways to Remember Minnesota Veterinary Medical Foundation In Your Estate Plan Ways to Remember Minnesota Veterinary Medical Foundation In Your Estate Plan The Rewards of Charitable Giving Design a Plan That Fits Your Needs As you confront the challenges of the future, the Minnesota

More information

The. Estate Planner. Is your estate plan flexible? Estate tax law uncertainty requires options. No time like the present

The. Estate Planner. Is your estate plan flexible? Estate tax law uncertainty requires options. No time like the present The Estate Planner July/August 2012 Is your estate plan flexible? Estate tax law uncertainty requires options No time like the present With favorable estate tax and real estate environments, use a QPRT

More information

The Basics of Estate Planning

The Basics of Estate Planning The Basics of Estate Planning Introduction The process of estate planning can be a daunting prospect. Often individuals will avoid the process altogether. Obviously, this is not the best approach since

More information

Funding Options. Life Insurance:

Funding Options. Life Insurance: Living Trusts There are several disadvantages of wills. Wills go through probate and probate can be expensive. It can cause lengthy delays in the distribution of property to your heirs. Your will is open

More information

Featured Article: Contingent Owner Survivorship Life and the Standby Disclaimer ILIT

Featured Article: Contingent Owner Survivorship Life and the Standby Disclaimer ILIT Featured Article: Contingent Owner Survivorship Life and the Standby Disclaimer ILIT Russell E. Towers JD, CLU, ChFC Vice President - Business & Estate Planning Brokers' Service Marketing Group Introduction

More information

Asher Law Group, APC

Asher Law Group, APC Selecting the Best Estate Planning Strategies Asher Law Group, APC Tax-smart legal services that safe guard your wealth 1901 Avenue of the Stars 11th Floor x Los Angeles, CA 90067-6002 x www.lataxlawyer.com

More information

Life Insurance Gifts: Planning Considerations

Life Insurance Gifts: Planning Considerations Life Insurance Gifts: Planning Considerations Gifts of life insurance are an additional option for charitable giving. While life insurance is not the answer to every financial planning and estate planning

More information

Zero Estate Tax Strategy

Zero Estate Tax Strategy Zero Estate Tax Strategy AN PLANNING STRATEGY USING LIFE INSURANCE, A FOUNDATION, AND WEALTH REPLACEMENT TRUST The Prudential Insurance Company of America 0257697 0257697-00003-00 Ed. 07/2015 Exp. 01/20/2017

More information

By Edward L. Perkins, JD, LLM. CPE CREDIT - 1.0 Hour of Interactive Self-Study

By Edward L. Perkins, JD, LLM. CPE CREDIT - 1.0 Hour of Interactive Self-Study Estate Planning After the Tax Relief Act of 2010 What to Do? By Edward L. Perkins, JD, LLM CPE CREDIT - 1.0 Hour of Interactive Self-Study FIELD OF STUDY - Taxation PROGRAM LEVEL - Intermediate PREREQUISITE

More information

Annuity Rescue Strategy

Annuity Rescue Strategy Annuity Rescue Strategy An estate planning technique for individuals who own deferred annuities with sizable growth. Transamerica Occidental Life Insurance Company Despite the advantage of tax-deferred

More information

Taking Advantage of the New Gift and Estate Tax Law

Taking Advantage of the New Gift and Estate Tax Law product resource Taking Advantage of the New Gift and Estate Tax Law summary tra 2010 in brief Congressional debate about whether to extend tax cuts put into place during the Bush administration came to

More information

Estate Planning. Multi-Generation Trust Producer Guide. For agent use only. Not for public distribution.

Estate Planning. Multi-Generation Trust Producer Guide. For agent use only. Not for public distribution. Estate Planning Multi-Generation Trust Producer Guide For agent use only. Not for public distribution. Introduction Life insurance can be a versatile, multi-purpose financial asset for grandparents to

More information

IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1)

IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1) IRREVOCABLE LIFE INSURANCE TRUSTS FOR ESTATE AND TAX PLANNING (Estate Planning Advisory No. 1) This Advisory discusses the general estate planning and asset protection benefits of an irrevocable life insurance

More information

Section 79 Permanent Benefit Plans. Producer Guide. Your future. Made easier. LIFE INSURANCE

Section 79 Permanent Benefit Plans. Producer Guide. Your future. Made easier. LIFE INSURANCE Section 79 Permanent Benefit Plans Producer Guide These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matters

More information

KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655

KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655 KURT D. PANOUSES, P.A. ATTORNEYS AND COUNSELORS AT LAW 310 Fifth Avenue Indialantic, FL 32903 (321) 729-9455 FAX: (321) 768-2655 Kurt D. Panouses is Board Certified by the Florida Bar as a Specialist in

More information

CLIENT GUIDE. Advanced Markets. Estate Planning Client Guide

CLIENT GUIDE. Advanced Markets. Estate Planning Client Guide CLIENT GUIDE Advanced Markets Estate Planning Client Guide TABLE OF CONTENTS Why Create an Estate Plan?........................ 1 Basic Estate Planning Tools......................... 2 Funding an Irrevocable

More information

Estate Planning. Some common tools used to help meet those particular needs include:

Estate Planning. Some common tools used to help meet those particular needs include: Estate Planning The Importance of Having an Estate Plan Having an estate plan is one of the most important things you can do for your family. It's not just about planning for estate taxes; it's about developing

More information

Client Tax Letter. Reducing Uncertainty, Increasing. Complexity. What s Inside. April/May/June 2013

Client Tax Letter. Reducing Uncertainty, Increasing. Complexity. What s Inside. April/May/June 2013 Client Tax Letter Tax Saving and Planning Strategies from your Trusted Business Advisor sm Reducing Uncertainty, Increasing Complexity Each April, most Americans file their income tax returns for the previous

More information

Blueprints for Business. Executive Bonus Arrangements Using Life Insurance Producer Guide. Your future. Made easier. SM LIFE

Blueprints for Business. Executive Bonus Arrangements Using Life Insurance Producer Guide. Your future. Made easier. SM LIFE Blueprints for Business Executive Bonus Arrangements Using Life Insurance Producer Guide These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion or

More information

Advanced Markets Combining Estate Planning Techniques A Powerful Strategy

Advanced Markets Combining Estate Planning Techniques A Powerful Strategy Life insurance can help meet many wealth transfer goals. The death benefit could cover estate taxes, for instance, avoiding liquidation of much of the estate to meet the estate tax bill. Even though a

More information

Retirement Extra using Life Insurance

Retirement Extra using Life Insurance Retirement Extra using Life Insurance Producer Guide Retirement Extra using Life Insurance is, first and foremost, a concept, it is not a product or contract. If this concept material will be used to promote

More information

A World of Future Opportunity or. Life

A World of Future Opportunity or. Life Life A World of Future Opportunity or These materials are not intended to be used to avoid tax penalties, and were prepared to support the promotion or marketing of the matter addressed in this document.

More information

IRA Maximization. Wealth transfer strategies to enhance your legacy CLC.1124 (05.14)

IRA Maximization. Wealth transfer strategies to enhance your legacy CLC.1124 (05.14) Maximization Wealth transfer strategies to enhance your legacy CLC.1124 (05.14) Congratulations! For many years you ve put in the hard work planning, saving and investing for retirement. With all of that

More information

Insurance. Survivorship Life. Insurance. The Company You Keep

Insurance. Survivorship Life. Insurance. The Company You Keep Insurance Survivorship Life Insurance The Company You Keep Permanent Life Insurance Protection for Two People You ve built a legacy, but who will be the recipients your heirs or the IRS? 1 Now is the time

More information

No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency

No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency Understanding Trusts A Summary of Trusts for Estate Planning No bank guarantee Not a deposit May lose value Not FDIC/NCUA insured Not insured by any federal government agency 6/13 23171-13A Contents What

More information

Irrevocable Life Insurance Trust Producer Guide. For agent use only. Not for public distribution.

Irrevocable Life Insurance Trust Producer Guide. For agent use only. Not for public distribution. Irrevocable Life Insurance Trust Producer Guide For agent use only. Not for public distribution. Irrevocable Life Insurance Trust (ILIT) Over the last several decades, life insurance policies have become

More information

Overview of Different Types of Trusts

Overview of Different Types of Trusts Overview of Different Types of Trusts Living Trusts The living trust is very popular in America. A living trust helps you avoid the cost and delay of probate. You can also avoid the dangers from jointly

More information

A Sole Proprietor Insured Buy-Sell Plan

A Sole Proprietor Insured Buy-Sell Plan A Sole Proprietor Insured Buy-Sell Plan At a sole proprietor s death, the business is dissolved and all business assets and liabilities become part of the sole proprietor's personal estate. Have you evaluated

More information

Diabetes Partnership of Cleveland s Planned Giving Guide

Diabetes Partnership of Cleveland s Planned Giving Guide Diabetes Partnership of Cleveland s Planned Giving Guide Diabetes Partnership of Cleveland s Planned Giving Guide TABLE OF CONTENTS Life Insurance Gifts Page 2 Charitable Gifts of IRAs.Page 3 Charitable

More information

Permanent Benefit Group Life Insurance Under Code Section 79

Permanent Benefit Group Life Insurance Under Code Section 79 Permanent Benefit Group Life Insurance Under Code Section 79 Expanding the Benefits of Group Life Insurance Advantages of Permanent Benefit Group Life Insurance. Giving employees the option to use cash

More information

GIFTS: THE KEY TO ESTATE TAX SAVINGS

GIFTS: THE KEY TO ESTATE TAX SAVINGS GIFTS: THE KEY TO ESTATE TAX SAVINGS THE LAW FIRM OF ELLEN M. WINKLER 58 Atlantic Avenue Marblehead, MA 01945 Tel. 781-631-6404 Fax 781-631-7338 www.emwinklerlaw.com Estate taxes can take a significant

More information

IS A TRUST RIGHT FOR YOU?

IS A TRUST RIGHT FOR YOU? : IS A TRUST RIGHT FOR YOU? You take care of your family and work hard for the things you ve acquired. You take the necessary steps during life to ensure your family s security and well-being and to avoid

More information

The Effective Use of Life Insurance in Wealth Transfer Planning

The Effective Use of Life Insurance in Wealth Transfer Planning INDIVIDUAL LIFE INSURANCE A Consumer Resource The Effective Use of Life Insurance in Wealth Transfer Planning A Guide for Professionals and Consumers Table of Contents INTRODUCTION What is Wealth Transfer

More information

A case for 529 plans. Save for college as part of your broader financial plan INHERIT THE THINKING OF J.P. MORGAN

A case for 529 plans. Save for college as part of your broader financial plan INHERIT THE THINKING OF J.P. MORGAN A case for 529 plans Save for college as part of your broader financial plan INHERIT THE THINKING OF J.P. MORGAN INVESTMENTS ARE NOT FDIC INSURED, MAY LOSE VALUE AND ARE NOT BANK GUARANTEED. 0 NEW YORK

More information

Wealth transfer and gifting strategies. A guide to lifetime gifts. Life s better when we re connected

Wealth transfer and gifting strategies. A guide to lifetime gifts. Life s better when we re connected Wealth transfer and gifting strategies A guide to lifetime gifts Life s better when we re connected Index 3 Introduction 4 Transfer tax basics 5 An overview of the federal gift tax system 6 Outright gifts

More information

BASICS * Irrevocable Life Insurance Trusts

BASICS * Irrevocable Life Insurance Trusts KAREN S. GERSTNER & ASSOCIATES, P.C. 5615 Kirby Drive, Suite 306 Houston, Texas 77005-2448 Telephone (713) 520-5205 Fax (713) 520-5235 www.gerstnerlaw.com BASICS * Irrevocable Life Insurance Trusts Synopsis

More information

Leveraging wealth transfer using private financing

Leveraging wealth transfer using private financing Private Financing Strategy Leveraging wealth transfer using private financing Not a bank or credit union deposit or obligation Not insured by any federal government agency Not FDIC or NCUA/NCUSIF insured

More information

estate and gift tax planning

estate and gift tax planning estate and gift tax planning On January 1, 2013, Congress enacted ATRA. This law created certainty and provides for planning opportunities to reduce tax cost of transferring your assets to your beneficiaries.

More information

HERMENZE & MARCANTONIO LLC ADVANCED ESTATE PLANNING TECHNIQUES - 2015

HERMENZE & MARCANTONIO LLC ADVANCED ESTATE PLANNING TECHNIQUES - 2015 HERMENZE & MARCANTONIO LLC ADVANCED ESTATE PLANNING TECHNIQUES - 2015 I. Overview of federal, Connecticut, and New York estate and gift taxes. A. Federal 1. 40% tax rate. 2. Unlimited estate and gift tax

More information

A Trust Investment Policy Statement

A Trust Investment Policy Statement A Trust Investment Policy Statement A Trust Investment Policy Statement The Uniform Prudent Investor Act (UPIA) made significant changes that affect the duties of trustees who manage trust assets. Trustees

More information

MAXIMIZATION ANNUITY STRATEGY. An estate planning technique for individuals who own deferred annuities with sizable growth.

MAXIMIZATION ANNUITY STRATEGY. An estate planning technique for individuals who own deferred annuities with sizable growth. ANNUITY MAXIMIZATION STRATEGY An estate planning technique for individuals who own deferred annuities with sizable growth. Transamerica Occidental Life Insurance Company Preserving Hard-Earned Assets As

More information

LIFE INSURANCE TRUSTS

LIFE INSURANCE TRUSTS LIFE INSURANCE TRUSTS Robert M. Mendell, JD, CPA* Robert M. Mendell, Attorney at Law, P.C. 908 Town & Country Blvd. Suite 120 Houston, Texas 77024 (713) 888-0700 Fax: (713) 888-0800 Email: rmendell@mendellgroup.com

More information

IDEAS December 2013. Life Insurance and Roth IRAs: The Dynamic Duo

IDEAS December 2013. Life Insurance and Roth IRAs: The Dynamic Duo IDEAS December 2013 Life Insurance and Roth IRAs: The Dynamic Duo Summary Clients who face income from minimum distributions on qualified plans and IRAs but do not need that income can benefit from a conversion

More information

The Need for Life Insurance

The Need for Life Insurance Page 1 of 5 From Jared Adams Condie & Adams, PLLC 603 4th Avenue, Suite 200 Kirkland, WA 98033 4254501040 Volume 2, Issue 2 Planning for the New "Zero Percent" Tax Bracket The Need for Life Insurance Condie

More information

Estate Planning, Probate & Asset Protec-

Estate Planning, Probate & Asset Protec- Estate Planning, Probate & Asset Protec- June 2011 Midyear Tax Update and Planning Guide Changes to the Estate Tax Laws Create a Brief Window of Opportunity to Reduce Tax Exposure, But Only for Clients

More information

Irrevocable Life Insurance Trust

Irrevocable Life Insurance Trust Davis & Graves CPA LLP Jerry Davis, CPA/PFS 700 N Main Gresham, OR 97009 503-665-0173 jerryd@davisgraves.com www.jjdcpa.com Irrevocable Life Insurance Trust Page 1 of 9, see disclaimer on final page Irrevocable

More information

Understanding Irrevocable Life Insurance Trusts

Understanding Irrevocable Life Insurance Trusts Understanding Irrevocable Life Insurance Trusts Understanding Irrevocable Life Insurance Trusts DISCUSSION TOPICS What is an Irrevocable Life Insurance Trust? How Does an Irrevocable Life Insurance Trust

More information

Insight on estate planning

Insight on estate planning Insight on estate planning june.july.2004 Irrevocable life insurance trusts 5 things you need to know about to save taxes Should a trust be the beneficiary of your retirement plan? Providing estate plan

More information

Annuity Maximization Strategy

Annuity Maximization Strategy Annuity Maximization Strategy Preserving Hard-Earned Annuity Assets t r a n s a m e r i c a 1 Alternatives to help protect financial assets, increase current income stream, or decrease income tax liabilities

More information

Twelve Life Insurance Mistakes They Aren t Cheaper By the Dozen

Twelve Life Insurance Mistakes They Aren t Cheaper By the Dozen ESTATE PLANNING THE PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA Twelve Life Insurance Mistakes They Aren t Cheaper By the Dozen Life is full of mistakes. They are part of life s learning experiences.

More information

An n u i t y. Preserving Hard-Earned Annuity Assets. t r a n s a m e r i c a 1

An n u i t y. Preserving Hard-Earned Annuity Assets. t r a n s a m e r i c a 1 An n u i t y Maximization Strategy Preserving Hard-Earned Annuity Assets t r a n s a m e r i c a 1 Alternatives to help protect financial assets, increase current income stream, or decrease income tax

More information

Most of ATRA s provisions benefit individual taxpayers through extensions of lower tax rates, certain deductions 10% 10% 15% 15% 25% 25% 28% 28%

Most of ATRA s provisions benefit individual taxpayers through extensions of lower tax rates, certain deductions 10% 10% 15% 15% 25% 25% 28% 28% TAX ACT OVERVIEW American Taxpayer Relief Act saves taxes for many, boosts them for some On Jan. 1, Congress passed the American Taxpayer Relief Act of 2012 (ATRA) to address the fiscal cliff a combination

More information

Wealth Structuring and Estate Planning. Your vision and your legacy. Life s better when we re connected

Wealth Structuring and Estate Planning. Your vision and your legacy. Life s better when we re connected Wealth Structuring and Estate Planning Your vision and your legacy Life s better when we re connected Inside 1 Helping you shape the future 2 The elements of wealth structuring 4 The power and flexibility

More information

Estate Planning Considerations for Ohio Families

Estate Planning Considerations for Ohio Families Estate Planning Considerations for Ohio Families Section 9 Ohio and Federal Estate Settlement Costs by Jim Polson, David Miller, and Russell Cunningham* Competent estate planning requires consideration

More information

THE ADVISOR. An Estate Planning Publication from The Law Office of Stephen Bezaire SOME CLARITY CONCERNING FEDERAL ESTATE TAXES

THE ADVISOR. An Estate Planning Publication from The Law Office of Stephen Bezaire SOME CLARITY CONCERNING FEDERAL ESTATE TAXES THE ADVISOR 2700 E. Foothill Blvd, Ste 306, Pasadena, CA 91107 (626) 585-6970 Spring 2013 An Estate Planning Publication from The Law Office of Stephen Bezaire SOME CLARITY CONCERNING FEDERAL ESTATE TAXES

More information

ADVANCED PLANNING CONCEPTS IN LIGHT OF THE AMERICAN TAXPAYER RELIEF ACT (October 11, 2013)

ADVANCED PLANNING CONCEPTS IN LIGHT OF THE AMERICAN TAXPAYER RELIEF ACT (October 11, 2013) ADVANCED PLANNING CONCEPTS IN LIGHT OF THE AMERICAN TAXPAYER RELIEF ACT (October 11, 2013) By: Phoebe Moffatt, Attorney CERTIFIED AS A SPECIALIST IN ESTATE AND TRUST LAW STATE BAR OF ARIZONA BOARD OF LEGAL

More information

UNITED STATES HOLOCAUST MEMORIAL MUSEUM

UNITED STATES HOLOCAUST MEMORIAL MUSEUM Honor the last generation. Enlighten the next. Leave a legacy bequest to the Museum. Retirement Plan Assets: A Smart Way to Secure Your Legacy UNITED STATES HOLOCAUST MEMORIAL MUSEUM 100 Raoul Wallenberg

More information

IN THIS ISSUE: July, 2011 j Income Tax Planning Concepts in Estate Planning

IN THIS ISSUE: July, 2011 j Income Tax Planning Concepts in Estate Planning IN THIS ISSUE: Goals of Income Tax Planning Basic Estate Planning Has No Income Tax Impact Advanced Estate Planning Can Have Income Tax Implications Taxation of Corporations, LLCs, Partnerships and Non-

More information

Wealth and Taxes: Planning for 2014

Wealth and Taxes: Planning for 2014 NOVEMBER 2013 Wealth and Taxes: Planning for 2014 2013 YEAR-END TAX PLANNING GUIDE TABLE OF CONTENTS On January 1, 2013, Congress passed the American Taxpayer Relief Act (ATRA), which addressed the scheduled

More information

EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT. An Estate Planning Primer

EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT. An Estate Planning Primer EVERYTHING YOU OWN & EVERYONE YOU CARE ABOUT An Estate Planning Primer For The Clients Of 7350 Cirque Drive W, Suite 201 University Place, WA 98467 (253) 759 8354 www.ppatpa.com Presented By T. Gary Connett

More information

Prepared For: The Client Family

Prepared For: The Client Family Annuity Maximization Estate Planning and Deferred Annuities - Annuitization Prepared For: The Client Family Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA and

More information