By Richard E. Nottingham CLU, ChFC Recently, I helped a client sell a no-longer-needed life insurance policy for far more than its cash surrender value. The policy’s cash surrender value was $61,000. Instead, via life settlement, they received a check for $540,000. A life settlement is a transaction involving the sale of an existing life insurance policy by the policy’s owner to a life settlement company. The result of this strategy can net the policy owner a sum many times greater than the policy’s cash value and provide the policy owner substantially more than the total premiums paid for the…
The 2022 Biden Estate Tax Cliff: Preparing After the 1/1/2013 and 1/1/2021 Cliffs
By Steven J. Oshins, Esq., AEP (Distinguished) If you are an estate planner, you likely had your best revenue ever in 2012. Then you likely annihilated your previous revenue record in 2020. This happened because of the so-called “fear of missing out” with different tax “cliffs” expected to occur at the end of those two years, thereby causing a commotion among the wealthy. JANUARY 1, 2013 FISCAL CLIFF Rewind back to the year 2012. President Obama was in office and the $5 million estate and gift tax exemption was scheduled to expire and roll back to only $1 million at…
Protect Against Potential Retroactive Estate Tax Changes
By Martin M. Shenkman, CPA, MBA, PFS, AEP (Distinguished), J.D. The Biden Administration may reduce the exemption retroactively, perhaps even to January 1, 2021! It’s best to protect against a retroactive tax change. Retroactive tax changes sound unfair! Even Taylor Swift said: “It’s hard to fight when the fight ain’t fair.” But we’ll tell you how to fight that unfair tax fight! The law permits a retroactive tax change. See: Pension Benefit Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717 (1984); United States v. Carlton, 512 U.S. 26 (1994). The need for revenue, or the desire…
The Strange Case of Dr. Jekyll and Mr. Oshins: Staggered Distribution Trust versus Dynasty Trust
By Steven J. Oshins, Esq., AEP (Distinguished) Testing his theory that in every man dwells a good and an evil force, the reserved Dr. Jekyll develops a formula that separates the two, turning him into an argumentative estate planning attorney named Mr. Oshins who tells it like it is. Dr. Jekyll soon realizes he is becoming addicted to his darker self as he unleashes his opinions on the estate planning industry. In this article, Dr. Jekyll and Mr. Oshins tackle the differences between a Staggered Distribution Trust and a Dynasty Trust. As expected, Mr. Oshins will provide a different view…
Business Owners: No Divide in 2021
By David Giuliano, Business Coach There’s no denying that over the last 12 months, we have all experienced unprecedented change and uncertainty. What’s interesting to me is that the results are all over the spectrum. While some businesses have been affected terribly, others have flourished and are busier than ever. Like many, I am concerned about the great division in the country right now, and I’m sorry to say your business is far from immune to the impact created by it. By all means, this is not a new problem, but it’s one that has been undeniably exacerbated by the pandemic…
The Beneficiary Controlled Trust as the Centerpiece of the Estate Plan
By Steven J. Oshins, Esq., AEP (Distinguished) INTRODUCTION Most estate planning attorneys draft trusts that make mandatory distributions to the beneficiaries upon reaching certain ages. For example, many trusts pay out one-third upon the beneficiary reaching age 25, one-half of the balance upon the beneficiary reaching age 30 and the balance upon the beneficiary reaching age 35. This is commonly known as a Staggered Distribution Trust since the distributions are staggered over different time periods. The philosophy used in this type of trust design is that the beneficiaries have multiple opportunities to learn from their mistakes. However, Staggered Distribution Trusts…
Which Type of Trust is Most Important for Top 1% Financial Advisors to Know About?
By Steven J. Oshins, Esq., AEP (Distinguished) Are you a financial advisor? If so, you’re likely compensated in large part based on assets under management. Therefore, your interests are aligned with those of our clients. The better you do for them, the better you do for yourself. THE STATE INCOME TAX DRAG Just as it is frustrating for our clients in states with a state income tax to pay that tax on taxable dividends and capital gains, it must be nearly as frustrating for the financial advisor whose income is also adversely affected by this state income tax drag. What if…
Free Checkup Meetings Generate Lots of Revenue!
By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law In a prior article, we discussed the “free service package” alternative to an annual maintenance fee program. The package included a free attorney checkup meeting every three years. You may be wondering, “How do you get your existing clients to come back in for these checkup meetings and actually generate additional revenue from them?” (Before I address these questions, let me first note that, even if you do have and decide to keep your current maintenance plan, periodic checkup…
Situs Your Trust in a First-Tier Trust Jurisdiction
By Steven J. Oshins, Esq., AEP (Distinguished) and Mark Dreschler Not all jurisdictions have favorable trust laws. In fact, most jurisdictions’ trust laws are inferior in comparison to those of the first-tier trust jurisdictions. Despite the limitations found in most trust jurisdictions laws, estate planners generally limit their planning to the client’s home jurisdiction. This article will provide multiple reasons not to do so and will explain some of the opportunities that are lost by failing to consider a top trust jurisdiction. COMMON REASONS TO SITUS A TRUST IN A TOP-TIER TRUST JURISDICTION Following are some of the common reasons…
Tips for Boosting Morale In Your Office This Thanksgiving
By Kristina Schneider, Practice-Building & Marketing Specialist There’s no doubt that this year has been a challenging one for many people – – both professionally and personally. There’s been a whirlwind of things going on this year and it’s hard to just “check it at the door” when you come into the office. Speaking with numerous attorneys about their current challenges in their practice, one thing seems certain. Office morale is down. Low morale at the office usually results in reduced productivity, compromised work performance, tardiness and absences, and even personal conflicts and emotional outbursts. As we wind down the…