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Estate Maximization

Understanding Liabilities

Under current tax law, the cash value in a life insurance policy accumulates tax-free, up to certain limits. This allows the income accumulation to compound without the erosion of annual taxation. Ultimately, when the insured dies, the death benefit paid on the policy is tax-free as well. This tax-free accumulation enhances the value of your estate and, sometimes even more importantly, allows for increased flexibility in the allocation of assets to the succeeding generation by providing liquidity at the crucial time of distribution. In the event of death, significant income tax liabilities can arise on the succession of assets to the next generation. The insurance proceeds can fund that expense.

“In the event of death, tax liabilities can arise on the succession of assets to the next generation.
The insurance proceeds can fund that expense.”

Many times, successful entrepreneurs have built their business only to see it fragmented in the event of their death. The liquidity provided by the insurance policy can facilitate passing of the business to family members who will carry on, while allowing cash bequests to those family members not involved in the business.

Are you a Candidate?

• Need permanent life insurance protection
• In a high marginal tax bracket
• Want to reduce the amount of tax you are currently paying on investments
• Have minimized non-deductible debt and want a tax effective succession plan
• Have a desire to protect net worth from future claims by creditors and litigation