Inherited Annuities

Inherited Non-Qualified Annuities for Spouses, Non-Spouses, and Trusts

Inherited Non-Qualified Annuities for Spouses, Non-Spouses, and Trusts It is somewhat common to be dealing with clients who have accumulated significant non-qualified annuity account values.  As a result of tax deferred Section 1035 exchanges over many years, it is not uncommon for business owners, professionals, and wealthy individuals to have large six figure or even […]

Risks of Premium Financed Life Insurance Owned by an ILIT

Premium financing plans between a financial institution and an Irrevocable Life Insurance Trust (ILIT) can be very complicated and risky arrangements.  Wealthy individuals who are familiar with leveraged financial risk   may desire to borrow money to pay large premiums for insurance owned by an ILIT to offset federal estate taxes.  Often, these individuals can […]

Competitive After-Tax Income for High Bracket Earners with Indexed UL

When an individual accumulates and then receives funds distributed from a financial asset to provide retirement income, there are 2 key values: After-Tax Rate of Return (ROR) and the After-Tax Income stream.  Various taxes must be taken into account when saving for retirement and receiving retirement income such as federal and state income taxes, and […]

Survivorship Universal Life Policy with Indemnity Joint LTC Rider Owned by an ILIT

A popular new product that has aroused the interest of many estate planners is a Guaranteed No-Lapse Survivorship Universal Life (SUL) Policy with an indemnity joint long term care (LTC) rider.  This type of policy would typically be owned by an irrevocable life insurance trust (ILIT) to provide an income and estate tax-free death benefit at the second […]

Obama Budget Proposal for Fiscal Year 2017

President Obama has released his “Greenbook” budget proposal for fiscal year 2017.  It renews a number of items from past budget proposals.  The Republican Congress will disagree with many of the proposals based on statements from Republican leaders in both the Senate and the House.  Certain broad subjects may offer a chance for compromise, especially […]

SPIA Settlement Options Can Provide Guaranteed Income

IRS issued Final Regulations in April 2002 on required minimum distributions (RMD) from IRA accounts which are Defined Contribution accounts such as mutual funds, deferred annuities, and bank CDs.  You simply determine the account value from December 31st of the prior year and divide that amount by the annual attained age factor from the Uniform […]

IRA Conversion Rules: Using Tax-Free Life Insurance to Convert an IRA Into a Tax-Free Roth IRA

In 2010, the former $100,000 AGI limit to convert an IRA to a Roth IRA was permanently repealed.  No matter their age or income, anyone with an IRA has the option to convert it to a tax-free Roth IRA, at any time, as long as the income taxes on the conversion are paid.   Often, […]

Qualified Personal Residence Trusts Can Reduce Estate Taxes

The Qualified Personal Residence Trust (QPRT) has become a basic estate planning tool used by many estate planning attorneys as part of their standard package of estate planning documents.  It offers significant estate tax reduction if the estate owner(s) survive to the end of the term specified in the trust. Self Balancing Scooter Self Balancing […]

The 3 Year Rule of IRC Section 2035 when an ILIT Does Not Yet Exist

Often, a financial professional will be dealing with a wealthy client who needs life insurance to offset federal and state estate taxes. The common solution is typically a single life or survivorship life policy owned by an Irrevocable Life Insurance Trust (ILIT). Self Balancing Scooter Self Balancing Scooter Sale   Of course, the ILIT must […]

The New Cost Basis Reporting Law and Its Impact Estate Planning

On July 31, 2015, President Obama signed into law a bill passed by Congress for federal transportation funding. New IRC Section 6035 was quietly slipped into the transportation bill extension. IRC Section 6035 requires executors of estates to start providing cost basis reports to the IRS and beneficiaries of the deceased estate owner on new […]