Category Archives: Life Insurance

Another Planning Option: Combining the Benefits of Life Insurance and the Credit Shelter Trust

“Acquiring life insurance on a surviving spouse inside a CST addresses multiple tax issues – it limits income tax associated with the CST assets and efficiently uses the estate and GST tax exemptions.  This approach also eliminates the need for annual gifts to an ILIT (and corresponding Crummey withdrawal notices) and more complex funding programs, like split dollar arrangements.” 

To read the full report, click here.

View Post

One Size Does Not Fit All: Tailoring an Insurance Trust – A Menu of Options

“Blended families, mobile beneficiaries, and new approaches to trusteeships require a flexible and highly customizable approach to irrevocable life insurance trusts (“ILITs”), one of the most common legacy planning tools.”

To read the full report, click here.

View Post

“Life Insurance Customers Push Back Over Surprise Cost Increases”

“Americans are starting to fight back against a wave of insurance-price increases on decades-old life policies.  Over the past year, several major insurers have notified tens of thousands of people of higher costs to keep their policies in force, with increases ranging from midsingle-digit percentages to more than 200%, according to financial advisers. To justify the increases, they blamed the impact on their investments from the Federal Reserve’s decision to keep interest rates lower for longer.”

For an in-depth explanation of the issue, please see my 12/16/15 email included with the link to the article below.  Bottom-Line – all policies 5 years and older should be reviewed to see if they are performing as originally intended.

To read the full article, click here.

 

View Post

Case Study Series – A Look at Sales: Conquering the Generational Divide with Multi-Tiered Life Insurance Planning

“It seems many advisors focus almost exclusively on one generation at a time when providing legacy management services; however, looking across multiple generations may produce far better results for the family.  Families will often have life insurance needs spanning generations. For advisors, viewing the entire family as one client can provide clarity as to each generation’s potential tax exposure, liquidity requirements, and even financial management needs.”

To read the full report, click here.

View Post

A Trustees Best Friend: Best Practices in Administering Life Insurance Trusts

“ILIT trustees have significant fiduciary duties that can result in serious liability if breached. To properly perform their duties and minimize exposure, ILIT fiduciaries should act independently, conduct or obtain regular, independent evaluations of the ILIT and policy performance, document their deliberations and decisions and, as appropriate, disclose and obtain waivers or consents from ILIT grantors and/or beneficiaries. Life insurance producers can add value by offering post-sale services, like policy monitoring and annual reviews of trust-owned life insurance products, as ways to support ILIT trustees in carrying out their duties.” 

To read the full report, click here.

View Post

Who Can You Trust with Your Policy? Finding the Right Fiduciaries for Insurance Trusts

“With the trust departments of many banks and retail brokerage firms turning away irrevocable life insurance trusts (“ILITs”), trustee selection becomes a rather challenging issue.”

To read the full report, click here.

View Post

Which Way Do I Go – The Impact of State Laws on Insurance Trusts

“State laws play a crucial role in meeting client objectives when creating an ILIT. As these laws can vary greatly state to state, clients must carefully consider their long-term impact on the ILIT. If a proposed ILIT has a potential legal connection or “nexus”  to multiple states, clients should choose the state for their ILIT deliberately, rather than by default. Several issues will likely affect the client’s decision, including application of state income taxes, whether the state allows perpetual or long-term trusts, the degree of protection provided from creditors, etc. It is important to review the state’s jurisdiction and laws to ensure that the ILIT is properly implemented.”

To read the full report, click here.

View Post

New Year – New Resolution: 6 Tips for Getting that Estate Plan in Shape

“Estate and life insurance planning are critical for all individuals to ensure adequate support for their families, to name guardians for minor children, to facilitate the distribution of their assets as desired, to minimize administrative hassles, to address tax planning, if needed, and, critically, to appoint agents to handle financial and medical decisions in the event of incapacity.”

To read the full report, click here.

View Post

Premium Financing – Fraud Charge Against Insurer and Broker Dismissed

“Institutional premium financing loans to ILITs—requiring collateral from the grantor to protect any shortfall between the amounts loaned and the policy cash value—are very complicated propositions.  Generally, this kind of premium financing should be considered only when….”

To read the full report, click here.

View Post