One example of the benefits of Strategic Estate-Living can be seen in the situation of long-term obligations to employees, such as health care, tuition or other benefits. As a company grows, original projections can become inaccurate and prompt a need for additional funds to fulfill obligations. Our programs can help business owners achieve financial security for the future.
Another smart use of strategic Asset-Leveraging is for Key Employee Compensation. One of our policies can augment an employee’s existing compensation and create additional wealth for his family.
Individuals often feel concerned about their existing universal life insurance policies when comparing them with the benefits of our programs. We can help evaluate, enhance and even replace existing coverage with greater death benefits and premium-financed policies that have no premiums to pay and little-to-no out-of-pocket costs.
Family-owned businesses, real estate and ranch properties present additional opportunities to apply the strategies of Premium-Financed Life Insurance. Estate transfers to various heirs in differing financial circumstances can be cumbersome and complicated. Life Insurance proceeds can supply cash to help prevent inheritance conflicts between heirs in a trying emotional time.
Using Estate-Asset leveraging strategies, wealthy individuals can increase the value of existing assets and actually produce additional income. We are helping our clients discover the opportunity to create additional wealth without the demand of paying cumbersome premiums.
A Perpetual Legacy Education Trust (PLET) is created for education funding for future generations. An Education Trust can guarantee tuition funds for the future in spite of unforeseen financial circumstances. A trust of this nature can allow that funds be accessed only through compliance with certain terms, such as minimum student GPAs, institution-specific enrollment, or other qualifiers.
Business owners understand the inherent problems in the continuation of business that accompany the death of a co-owner. With strategic Estate-Asset leveraging, business partners can plan to buy-out another’s interest in the business in the event of death. There are also issues of taxes and expenses, but by using one of our programs, your Buy-Sell arrangement can be secured.
There are three types of Buy-Sell Agreements. A Cross-Purchase arrangement allows owners to purchase the shares held by a retiring or deceased partner. Each owner has a Universal Life Insurance Policy on the other partners.
Another variation is known as Stock Redemption. A Stock Redemption Agreement allows that the Company will purchase the shares of the deceased.
The third variation is a combination of the first two with elements of each. A Company Buy-Sell Agreement could allow some shares to be purchased by other owners and some to be purchased by the Company.
In conclusion, although there are challenges in designing and managing appropriate Buy-Sell Agreements, the use of Premium-Financed Universal Life Insurance Policies can usher in the smooth transition of ownership with no out-of-pocket expenses.