The estate tax happens to be scheduled to be repealed this season (i.e., zero tax). However, President Obama’s new budget necessitates estates valued over $3.5M ($7M for married people) to be taxed at a rate of 45% next year and beyond. Given that kind of the existing 2009 levels, the modern administration argues that there is no estate tax increase. Which view do you handle this? (A) The proposed estate tax doesn’t rise as it mirrors 2019; or, (B) The proposed estate tax is vastly greater than the scheduled repeal from the estate tax this season. Some argue that this proposal signifies the most important estate tax boost in U.S. history. In all fairness, the current proposal is a lot more favorable to consumers after 2018.

An more popular than ever estate planning tool that lots of folks are still unaware of is premium financing for a lifetime insurance. Those that could qualify for premium financing for life insurance are individuals between the ages of 70 and 85 having a net worth that is at least $1 million.

4 Key Reasons to Consider Premium Financing:

  1. Estate planning
  2. Philanthropic planned giving
  3. Key person or business succession planning
  4. Uncovering an important hidden asset

Life insurance plans are known by many to get the top method of augmenting wealth transfer from down the family. Many individuals are unaware that they’ll make an application for a loan that can pay exorbitant annual insurance coverage premiums. The policy is an asset that may serve as primary collateral with this loan that may eventually be repaid through the policy proceeds. In turn, beneficiaries could use the tax-free “death benefit” to satisfy the estate tax.

Many clients augment their current estate planning with charitable planning by donating all or part of their insurance proceeds for their favorite charity or alma mater. Leveraging insurable capacity (i.e., financing term life insurance) is especially attractive for older key-person executives. Consumers probably know that this quantity of insurance you can make an application for (insurable capacity) is commonly limited to the valuation of a business, personal net worth, or philanthropic involvement.

Paying term life insurance premiums can cause somebody to liquidate important assets, like their investment portfolio. Avoiding the sale of stocks or properties at the same time when values are in record lows is often a major incentive for astute financial advisors to recommend financed life insurance coverage for clients.

In today’s overall economy, many individuals over 65 opting to trade their existing policies due to a greater need for liquidity. Many consumers have learned that life insurance policies are a hidden personal asset that may be auctioned off in the client’s lifetime on the highest bidder for a discount of the face value, sometimes called a “life settlement” or “living benefit”.

The initial application process is a non-committal phrase and in most cases takes around 30 days to find out if a client qualifies. For those that qualify, it is very important to carefully review risks versus rewards and also to work which has a specialized premium financing company containing solid references having an advanced level of experience and compliance within the industry.