Congress has passed and President Trump has signed into law significant retirement reform which will go into effect on 1/1/2020. The new law has many provisions which involve expanding and preserving retirement savings, administrative improvements, and revenue provisions.Read More
Which entity to own life insurance?
The popularity of the irrevocable life insurance trust (ILIT) is well documented. Billions of dollars have been gifted by estate owners to single life and survivorship life irrevocable trusts to help fund the payment of federal estate taxes. Yet, a number of disadvantages revolving around lack of flexibility and lack of control discourage the use of such trusts in certain situations. When estate owners realize an irrevocable trust cannot be changed, they sometimes decide to think about it. Or when estate owners realize they don't own the cash value of the policy and have no access to it for lifetime financial needs, they feel a loss of control.Read More
At one point or another, you have encountered a client who has multiple IRA accounts that may have been created at different times with different funding products. You may have even recommended two separate IRA accounts to a client, each with different financial purpose for different designated beneficiaries. In either one of these events the US Treasury Regulations treat certain IRA accounts differently when it comes to distributing IRA Required Minimum Distributions (RMD) from these accounts once the client reaches age 70½.Read More
One of the most important planning issues confronting a business owner is what happens to his or her share of the business upon death.
Since the federal estate tax exemption is $5.43 million (single) and $10.86 million (married), does paying premiums for life insurance owned by an Irrevocable Life Insurance Trust (ILIT) that was purchased years ago when the estate tax exemption was much lower make sense anymore?
Are there other important retirement and protection needs that could be covered with the annual premium that has been gifted to the ILIT for many years?
A current no-lapse single-life universal life (UL) policy or no-lapse survivorship universal life (SUL) policy may still provide a good internal rate of return (IRR) on death benefit at life expectancy. And the pre-tax equivalent is even better because the life insurance death benefit is income tax-free. However, the federal estate tax exemption may have only been between $1,000,000 and $2,000,000 when the trust-owned policy was purchased and it made sense at the time to offset projected estate taxes with estate tax-free insurance owned by the ILIT.