Tracking Cost Basis & Gain for Annuity Transactions

Deferred annuities and single premium immediate annuities (SPIA) are great financial vehicles for either tax-deferred accumulation of a retirement fund or efficient distribution of principal and interest over life expectancy.  However, over the lifetime of the contract owner, financial and estate planning situations occur which require a transaction to be executed on an existing annuity […]

Family Limited Parterships vs. ILITs: Choosing Which Entity To Own Life Insurance

The popularity of the irrevocable life insurance trust is well documented. Billions of dollars have been gifted by estate owners to single life and survivorship life irrevocable trusts to help fund the payment of federal estate taxes. Yet, a number of disadvantages revolving around lack of flexibility and lack of control discourage the use of […]

Bankruptcy Protection for IRAs (YES) vs. Inherited IRAs (NO)

In 2005, President Bush signed into law the Bankruptcy Act of 2005. The Act extended significant bankruptcy protection to IRAs by exemption and exclusions of certain amounts from a bankruptcy estate.   Contributory IRAs and Rollovers / Direct Transfers from Employer Qualified Plans   The exemption for contributory IRAs is generally limited to an aggregate […]

Creating an Inherited IRA Legacy Plan with Life Insurance Funded by After-Tax Distributions

With the recovery of the equities markets after the economic downturn of 2008-2009, it is common for successful business owners, professionals, and other individuals to have more than $1,000,000 in their IRA account. Many of these IRA owners have multiple sources of income as they approach their retirement years. These sources could include continued earned income […]


Implications of the Supreme Court Decision on Same-Sex Marriage

In a 5-4 decision, the U.S. Supreme Court ruled that the principles of due process and equal protection of the U.S. Constitution’s 14th Amendment require all states to recognize the legal validity of same-sex marriage. As a result, all states must immediately allow same-sex couples to marry. In addition, all states must recognize the validity of […]


Original carrier announcements that are highlighted below are available upon request. Contact Russ Towers   Nationwide   Effective October 12, 2015, Nationwide is changing the pricing on its YourLife No-Lapse SUL II product.  For issue ages 55-75, the no-lapse guarantee to age 120 premium decreases by 6% on average; for level pays and 10 […]

Section 1035 Exchange Of A Life Insurance Policy With Loans

IRC Section 1035 allows Tax Free Exchanges of life insurance policies in a gain position (i.e. gross cash value greater than adjusted cost basis) so that cash values can be easily transferred to more financially efficient policies.  Sometimes greater death benefit and/or lower premium can result from the exchange in addition to desirable contract guarantees. […]

Requirements to Change State of Residency

It’s Not As Easy As You Think!   Often, wealthy older clients from high tax states will consider moving to a lower taxed state to save taxes. This typically involve state income taxes on retirement benefits and state estate taxes on their net worth /gross estates. You may have heard people say “If I live […]


Original carrier announcements that are highlighted below are available upon request. Contact Russ Towers   Genworth   Effective August 17, 2015, Genworth has increased the Total Living Coverage (TLC) credited interest rate from 3.60% to 3.85% on new policies. With this update, TLC will have an average advantage of 30% higher leverage on both […]

Life Insurance Ownership Changes & the “Transfer for Value Rule” of IRC Section 101

Life insurance policies sometimes have a need to be transferred from the original policy owner to a new policy owner. When a transfer of ownership takes place (absolute assignment or change of ownership form), financial professionals should be concerned about the so-called Transfer for Value Rule (TFV) and qualifying for one of the TFV exceptions. […]