Wealth Transfer

Wealth Transfer planning is the process of positioning assets that will not be needed during a person’s lifetime so that they may be transferred in an efficient manner to the next generation. An effective wealth transfer plan will allow you to transfer wealth to your heirs in a financially sound and, in some cases, a tax-advantaged manner. Most anyone should be concerned with wealth transfer planning at some level. A common misconception about wealth transfer planning is that it is only for the wealthy.

While the wealthy may require sophisticated estate planning, wealth transfer planning is beneficial to everyone who has assets that will need to be transferred upon death. Depending on a person’s age, family status and asset mix, the wealth transfer process may be as simple as repositioning assets or establishing a will. It could also be as complex as establishing and funding trusts, or setting in place a variety of tax-reducing strategies.


Wealth Transfer Planning

Consumers who are in a position to accumulate wealth and are considering leaving a significant amount of inheritance or death benefit to their heirs probably have a spread of assets tied to many financial products. The concern with wealth transfer is how much total value will be stripped away by things like estate and income tax. Consumers may be unaware of the alternative processes to minimize tax burdens and maximize asset transfers, even if their overall financial portfolio includes a mix of products like deferred annuities, SPIAs, life insurance, Certificates of Deposit, and bonds.

Click here to access a free guide that details some aspects of wealth transfer planning through asset repositioning.


Municipal Bond Maximization

Clients may be concerned with their current planning techniques and cash gift strategies, due to changes with estate tax and market volatility. There may be other beneficial strategies that consumers can explore that will minimize their tax burden, such as municipal bond maximization. In this strategy, a consumer converts or exchanges bonds for a Single Premium Immediate Annuity (SPIA). The client can then transfer after-tax income from a SPIA in to an Irrevocable Life Insurance Trust.

Click here to access more information about this planning strategy.


Income Maximization

Consumers may be facing concerns with their diversified retirement portfolios, especially as markets shift and new strategies emerge. Consumers nearing or in retirement are likely looking for conservative vehicles for their investments and ways to maximize their income resources. Income Maximization is a strategy that funnels assets such as money market funds, municipal or corporate bonds, or certificates of deposit into a Single Premium Immediate Annuity. The excess income from the SPIA is then used to establish an Irrevocable Life Insurance Trust, which then purchases a life insurance policy.

Click here to access more information about Income Maximization strategy.


Qualified Plan Maximization

Qualified plans like 401(k)s and traditional individual retirement accounts (IRAs) can be a great way to save for retirement. But because of the 70 ½ rule, where individuals must begin to take Required Minimum Distributions (RMDs) at age 70 ½, these accounts will not only be reduced by these distributions but also subject to income tax. Upon death, qualified accounts can be subject to tax twice over; first from in respect of decedent (IRD taxes) and estate taxes. This can whittle a significant portion of the net amount granted to heirs. Qualified Plan Maximization is a financial strategy that aims to minimize these tax burdens by using qualified assets to fund an Irrevocable Life Insurance Trust to then purchase life insurance for the client.

Click here to access more information about Qualified Plan Maximization and to learn how your clients might benefit from this financial strategy.


Endorsement Split Dollar

Endorsement Split Dollar is a financial arrangement between an employee and his or her employer, who both share the cost of life insurance. The company pays the larger portion of the life insurance premium and then endorses a death benefit to the employee as a pre-retirement survivorship benefit. The portion the employee is responsible for is known as the economic benefit portion and can be used to provide income upon retirement. Upon the death of the employee, the company receives a death benefit to recover costs.

Click here to access a free guide that outlines Endorsement Split Dollar arrangement.


Private Split Dollar

Private Split Dollar is a financial structure similar in spirit to Endorsement Split Dollar, except instead of an insured sharing the cost of coverage with his or her employer, the cost is split amongst private parties, usually between family members. Upon death or contract termination, the payer of the premium is entitled to the total premiums advanced or the policy’s cash value, the greater of the two.

Click here to access a free guide that details Private Split Dollar arrangements and how your clients may benefit from this structure.


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