castle insurance associates boston

castle insurance associates boston
Survivors of life is a life insurance policy that insured two people and pays at the second death. Even as the second to the life insurance, common abbreviations SWL survivors SUL whole life and universal life for survivors.

Benefits

Since insurance does not have to pay until the second person dies, the premium is lower.

The insurance company could be a standard policy, even if a person health. In extreme cases where a person is totally uninsurable, a policy with an acceptable premium is possible.

There are many applications for survivor life insurance. Let S to five.

Estate Taxes

Life insurance is the cheapest method that raises money for the payment of estate taxes. Since 1981, the law provides a spouse, to all their property to the other spouse at death tax free. This is the unlimited marital deduction. If there is an inheritance tax is due, it is not until the second spouse dies.

In response, life insurance companies, the survivors of life. Since the premium is less, it is even a better solution than an insurance one person only.

Replacing a wasted asset

Charitable remainder trusts (CRT) a person to sell a highly appreciated assets (stocks, land, businesses etc.), without a capital gains tax, a deduction of income tax and convert the asset to an income. At her death, the asset goes to the charity, not to their heirs.

A simple way to circumvent the children s disinheritance is to make sure Mom and Dad with a survivors life insurance for the value of assets to charitable organizations. Sometimes, the premiums will be entirely by the income from the charitable remainder trust, which is often money, if the original asset was illiquid. The tax deduction can be spread over six years if the asset to the CRT is big enough. This is another source of premium.

An inheritance

A couple has three children and a family business. One of the children is in the business and the other two have their own careers. If the bulk of the estate is the business and the plan is to leave the business to the active child, while the other two kids come up short.

A second-to-policy for the Mom and Dad can even things out. For example, s say, the entire property is 6 million and the economy equivalent to 4 million. If the parents are out of business on the active child and the remaining 2 million to the two other children and the names of the recipients of these children over a 6-million-dollar Survivor political life, everything is equal.

The child in the economy is in the business value of 4 million. The other two children will inherit 1 million piece of the balance of the estate and 3 million units from the survivors life.

Post Telephone Buy Sell

When Joe and Bill were equal partners in a business, good planning would have it with her lawyer and accountant, with a value for the company that each are happy with and have a buy-sell agreement is created. Funds for the agreement with life insurance and the funds are safe for the buyout.

But what if Joe s wife, Ann, is also in the company? When Joe dies, Joe Ann would inherit and interest to work in the business as usual. In this case, it would be useful to set up a survivors life insurance to insure both Joe and Ann. The buy-sell agreement would be formulated to ensure the buy-out at the second of her death.

For the payment of income tax on an inherited qualified plan

This is the day of the Mega-401 (k) plans. If a 401 (k), IRA or other qualified plan, for example for the children, income tax is on sales.

Most people do not realize the large potential tax on what may be your biggest asset. Let s look at the worst case. If the qualified plan money is among the top real estate tax, currently 45% and the child is also in the top income tax bracket, currently 35%, the amount left on the child is only a fraction of the total. Note: There is a deduction against income for estate taxes paid. A good estimate of the total share of net taxes paid at the top brackets is 70%.

Use a life survivors, to the income tax on dividends, inheritance taxes or both.

There are many other uses of surviving life. If your situation involves all of these examples, I would recommend looking at the use of a second on the policy.

Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, the state conservation consultant. For innovative, easy-to-understand financial planning resources and techniques to increase your income;