Universal Life Policy With Indemnity

Universal Life Policy With Indemnity LTC Rider Owned By An ILIT

The use of an Indemnity LTC Rider is crucial to keep the life insurance death benefit estate tax free. That’s because any rider benefits will be paid only to the ILIT as policy owner, and NOT used to pay extended care costs directly to the extended care provider. Since LTC benefit claims are paid only […]

How Different Types of Property are Legally Transferred at Death

When an individual dies, every piece of property owned by that deceased individual must be transferred to a new owner.  Both real property and personal property (tangible and intangible) can pass to the decedent’s heirs in a number of ways.  Property can take on many forms, such as shares of a closely held business (i.e. […]

Medicaid Planning and SPIAs

Medicaid Planning and SPIAs

Most assets of a married couple are considered to be “countable assets” for purposes of qualifying for Medicaid extended care benefits. This includes all assets held jointly by the couple as well as any assets held in the sole name of either spouse (including retirement plans like IRAs and non-qualified deferred annuities). Often, these combined […]

Advanced Sales September 2017 Blog

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 […]

1035 Exchange

IRC Section 1035 Exchanges Require Special Attention

Often a policy review of your client’s existing life insurance and annuity contracts will conclude that a more cost efficient contract with better guarantees and rates of return makes sense. This will cause a producer to seek a potential transfer of the existing cash values to a new contract via a tax free Section 1035 […]

Linked Benefit Products Offer Great Section 1035 Exchange Options

Linked Benefit Products Offer Great Section 1035 Exchange Options

IRC Section 1035 provides that exchanges into life insurance or annuity contracts with Long Term Care (LTC) riders will be income tax free because these riders are treated as  LTC contracts under IRC Section 7702B(e). These Section 1035 tax free exchange provisions positively impact so-called linked benefit life insurance-LTC products and linked benefit annuity-LTC products. […]

Advanced Sales June 2017

Durable Power of Attorney & No-Lapse Universal Life Insurance Owned by ILITs

As people age into their 80s with longer life expectancies, their mental capacity is often diminished when it comes to managing their financial affairs. This declining capacity suggests an interesting issue which can impact whether continued gifting of premiums to Irrevocable Life Insurance Trusts (ILITs) can take place. Many ILITs have been funded with no-lapse […]

5 ILIT Rescue Techniques

5 Rescue Techniques to Remove a Life Policy from an ILIT

The ILIT or Irrevocable Life Insurance Trust has played a major role in estate planning for many years as the best financial method to provide a fund of money that’s highly leveraged, income tax free, estate tax free, gift tax free and generation-skipping transfer tax free. However, over a period of time, the facts and […]

Grantor Trusts

Leverage Your Clients Tax Benefits by Using Grantor Trust Power of Substitution

For many years, irrevocable trusts have been structured for as grantor trusts, for income tax purposes, while still maintaining tax free status for estate tax purposes. A number of favorable IRS Revenue Rulings have solidified the irrevocable grantor trust power of substitution concept under IRC Section 675(4)(C). This concept allows a grantor to substitute assets […]

Distribution Options for Non-Qualified Annuities Email Size 3

Distribution Options for Inherited Non-Qualified Annuities

Often times we find ourselves dealing with clients who have accumulated significant non-qualified annuity account values. Tax deferred Section 1035 exchanges, over many years, may have caused business owners, professionals or wealthy individuals to have large six figure or even seven figure account balances. In these accounts, the original cost basis continues to carry over […]