Death Tax Mitigation Strategy
Guaranteed premium survivorship (2nd-to-die) life insurance policies are often the most tax-efficient financial tool married couples can deploy to leverage their death tax mitigation strategy. Guaranteed lump sums (including 1035s), short pays, and annual premium designs provide maximum funding flexibility. Peace of mind comes from knowing that, no matter what happens to interest rates, markets, or the economy, tax-free funds will be available exactly when the IRS comes calling! Let’s take a look at a recent example to illustrate the tax-free leverage only an optimally structured life insurance policy can provide.
Sam, M, 57, a successful Florida entrepreneur, and his wife Kim, F, 52 are aware of the pending changes to the tax code and have determined they need approximately $50,000,000 to fund estate taxes. Neither use tobacco and both are in good health. Their attorney recommends they place $50M of 2nd-to-die life insurance into an Irrevocable Life Insurance Trust (ILIT). Their Financial Advisor called us to survey the market and identify our industry’s most competitive funding options:
- $402,050 paid every year will guarantee $50,000,000
- $512,950 paid for 20 years will guarantee $50,000,000
- $960,105 paid for 15 years will guarantee $50,000,000
- $973,832 paid for 10 years will guarantee $50,000,000
Premiums and the death benefit, regardless of funding pattern, are fully guaranteed by one of our industry’s largest and most highly rated brand name insurers. The policy has no moving parts – everything is locked in when the policy is put in force. Super simple! Sam & Kim settled on 10 guaranteed premiums of $973,832, resulting in a leverage ratio of about 5:1!
When you are ready to show clients how easy it is to leverage taxable dollars in to a multiple of tax-free dollars, let’s team up to survey the market and identify our industry’s top solution(s). You’ll be well prepared to meet with your most important clients and pre-empt the competition. Be the FIRST Advisor to introduce your clients to leveraged tax-free wealth conveyance strategies. You can also team up with one of our Advanced Markets Experts to educate your clients about this important planning strategy.
Do you have access to healthy individuals or couples in their mid-50s to mid-70s with a net-worth of at least $10M? Do they love their family and hate paying unnecessary taxes? Let’s use our simple Estate Tax Estimator to educate them about the pending changes to the tax code – and why they benefit by acting – NOW! Connect with your CPS Advantage Representative to prepare for your client meeting. Or feel free to introduce the opportunity via an email. We look forward to making it easy for you and your client to leverage the tax code to their maximum advantage!
