The Washington Report: – Wealth Transfer Edition

“Four questions that every ownership change should trigger.  Life insurance policies change hands for a seemingly endless number of reasons. They move between trusts through gifts, sales, decanting, mergers, and modifications; among family members, such as for estate planning or divorce; and for business needs through buy-sell restructuring, mergers and acquisitions, corporate liquidations, and the unwinding of split dollar or other executive benefit arrangements. More recently, policies have become increasingly active assets in the secondary market through life settlement transactions. In short, life insurance policies are not stagnant contracts, but dynamic financial assets that frequently evolve alongside a client’s planning objectives. Although ownership changes are common, they are rarely simple. In fact, policy transfer issues are among the most frequent technical questions received by advanced planning departments.”

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