Category Archives: Estate Planning

Despite the benefits and prestige that come with working at a top U.S. law firm, small and mid-sized firms, as well as boutique offices, offer trusts and estates lawyers a much more attractive proposition.

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“The venerable law firm’s move to get out of the estate-planning business comes as the legal industry continues to emphasize more profitable practices.”

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“For many of the wealthy, the American Taxpayer Relief Act, passed this week by Congress, is aptly named.? For estate and gift taxes in particular, all but the richest of the rich will probably be able to protect their holdings from taxes, now that Congress has permanently set the estate and gift tax exemptions at $5 million (a level that will rise with inflation).”

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In light of current events, it?s fun looking back at the state of the industry when the Bush tax cuts were introduced.? The more things change, the more they stay the same.? From the article,??here are our fearless predictions on the impact that change ? whatever it is ? will have on the use of life insurance in the estate planning process and on planning in general.?? Near the end of the article we suggest a list of questions that clients and advisors might want to ask.

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?There is a simple, little-known technique that can enable you to use your life insurance losses to save thousands of dollars in taxes.?

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A private session presentation for the newest AEP?s and current ?AEP?s in Orlando in November at the 49th Annual Conference. ?You will not want to miss fellow designee Al Gibbons’ excellent presentation for active designees ONLY on Thursday 11/8/12 at 5:00 PM, “How AEP? Designees Can Work Effectively as Collaborative Teams and Why They Are Essential for High Net Worth Clients”. ?To read more about the conference and Al’s presentation, click here.

?there are a growing number of financial advisers and other professionals who themselves have special needs children or siblings.? Because they?ve been there, they know the practical steps that most families need to take.? What follows is a primer from those practitioners on the basics that families should consider when helping someone with special needs.

We are starting to see bulletins from several companies regarding price increases in no-lapse guarantee products due to new, higher reserve requirements.? Prices are going up, most likely effective 1/1/13.?

The Highlighted comments below show examples regarding re-pricing due, also, to low interest rates.? As you know, no-lapse guarantee products are very often trust-owned policies used for estate planning purposes for high net worth clients.? As Steve Leimberg and I correctly predicted in our January, 2010 article companies are withdrawing, compromising, or raising prices on no-lapse guarantee products.

If you have clients who are considering the purchase of new, trust-owned life insurance, they might be wise to do that sooner rather than later.

Penn Mutual ? Survivorship IUL (no longer accept formal applications for the Extended No-Lapse Guarantee (ENLG) Rider on the Survivorship Plus IUL product.? All pending applications of Survivorship Plus IUL that include the ENLG Rider, for which we make an underwriting offer, must be issued by December 7, 2012 and paid for by December 31, 2012 in order to receive the ENLG Rider)

Principal ? SUL Protector II (new; replaces SUL Protector; reprice consisting of price increase , with the most affecting being single and short pays; no single premium caps; illustration will haveguaranteed values only)

American General ? AG Secure Lifetime GUL (reprice; increased rates especially for limited-pay and single-pay cases;? will build cash value earlier than the original version of the product)

American General ? AG Secure Survivor GUL (single premium payments of $250,000 or more will no longer be accepted; this includes single payments of any type including one pay for the life of the policy, external or internal 1035 exchanges or dump-ins at any time during the first policy year)

Penn Mutual ? Accumulation Builder Choice IUL (new IUL; automatically includes a 30-year no-lapse guarantee for those ages 55 and younger, a to age 85 guarantee for ages 56-79 and a 5 ?year guarantee for ages 80-85.? choice of 3 indexed and 2 fixed accounts; 12-month DCA; 1% floor; guaranteed 100% participation rate; indexed loan option with a fixed loan rate; offers a Chronic Illness ADBR)

Aviva ? Guarantee UL Solution III, Advantage Builder IV w/NLG Rider and Survivorship Builder w/NLG rider (NLG rate premium increase; premium increase will range from 10% for most cases to upwards of 25% on single premium cases)

Nationwide ? YourLife IUL (guaranteed participation rate increased to 100% from 60%)

Prudential ? UL Protector (reprice; full pays will remain essentially unchanged on average; single-pay scenarios will increase approximately 13% on average; no change to comp or features)

Prudential ? SUL Protector (reprice; full pays will increase approximately 3% on average; single-pay scenarios will increase approximately 13% on average; no change to comp or feature)

Pacific Life ? Flexible Duration, Medium Duration, and Lifetime No-Lapse Guarantees Riders (reprice consisting of price increases; affects the Versa-Flex NLG, Pacific Prime UL-NLG, Pacific Prime IUL, Pacific Indexed Accumulator 4, Pacific Indexed Performer LT and Indexed Pacific Estate Preserver; reprice will have no effect on inforce policies or any products? short-term no-lapse guarantees)

An interesting article in today?s NY Times ? using property as a way take advantage of the gift-tax exemption that will be expiring the end of this year. ?How one family is making it work.

Steve Leimbergs Estate Planning Newsletters

(The following are posted with permissions)

Gordon Schaller & Maximizing 2012 Gifts: A New Concept for Procrastinators

The once-in-a-lifetime opportunity to gift $5 million without gift or GST tax will close on December 31, 2012. As of January 1, 2013, the gift tax exclusion will revert to $1 million and the gift and estate tax rate will revert to 55%, unless Congress takes action.

Steve Breitstone: Lapsing 2012 Estate Planning Opportunities & Large Estates Holding Businesses and Real Estate

The Obama Administration?s proposals to eliminate the current favorable treatment of grantor trusts may, if enacted, put an end to much of estate planning as we know it for the wealthier client who owns a business or actively managed real estate. These types of assets are typically illiquid.? Moreover, these clients may have estates that are too large to plan for with straightforward annual exclusion gifts or even gifts of the current lifetime exemption of $5,120,000.

To plan for these clients, it is necessary to leverage the exemptions. Most leveraging transactions (such as installment sales to intentionally defective grantor trusts and grantor retained annuity trusts) depend in large part on the ability to transfer assets to a grantor trust without incurring an income tax at the time of such transfer