By Michael W. Halloran, CFP®, AEP®, ChFC®, CLU® Whether owned in a revocable or irrevocable trust, many practitioners have used life insurance over the years. Depending upon the type of policy as well as current economic conditions, some problems could arise with many existing Trust Owned Life Insurance (TOLI) policies. The majority of problems with TOLI policies lie in irrevocable trusts. Many times the trustee places the policy in the trust without checking with the company to see if the policy is sustainable for the intended purpose of the trust. The coverage needs to stay in-force until the death of…
“Contextualizing” Life Insurance
By Jason Oshins, Financial Advisor, MBA Context is everything, and an important component of a financial advisor’s job is to contextualize the decision-making process to enable clients to make more effective decisions with a greater likelihood of long-term success. When planning for a couple’s retirement, I frequently begin by reviewing a life expectancy chart, emphasizing two components: (1) the potential gap between the first and second deaths and (2) the potential length of time before the second death is likely to occur. Assuming a healthy 40-something couple, the gap can be 10, 15, or 20 years, if not more, and…
Insurance as the Key Ingredient of the “New” Estate Planning
Summary of a Live Presentation by Martin M. Shenkman, J.D., CPA, MBA, PFS®, AEP (Distinguished) Despite the American Taxpayer Relief Act of 2012 (“ATRA”), which has now made the federal estate tax exemption “permanent” at $5.25 million, your high net worth clients should still consider estate tax planning right now. The gift exemption is still $5 million and there is a good chance this may be reduced in the future. Plus, the combined estate (or gift) tax rate and generation-skipping transfer tax rate is now 64% (not factoring in “decoupled” states’ estate tax)! Those clients who may have deferred planning…
Baby Boom Good for Life Insurance
More babies means greater demand for good old-fashioned cash-value life insurance. Young couples tend to buy life insurance to protect their families and babies are making a comeback. In fact, what has been called a “baby bust” in the United States is now over, according to a January report from Demographic Intelligence, published by W. Bradford Wilcox, associate professor of Sociology at University of Virginia, Charlottesville. In the wake of The Great Recession (2008-2012), the total fertility rate and the number of U.S. births fell more than 7 percent from 2007 to 2010, says Wilcox’s “U.S. Fertility Forecast.” The report…