With our home office now in the upper suites at the Gilbert, Arizona San Tan Mall, the ornaments and lights are festively hanging on the trees, Santa’s workshop is in full operation, and the streets are bustling with shoppers trying to find that ONE special Christmas gift.
I have been planning estates for over 45 years. Through the years, I have reviewed thousands of estates from gigantic to tiny, from organized to a disaster, from the massive farms of Missouri to a Ma and Pa Pizzeria in Cleveland.
During my career I have been fortunate enough to help design and implement strategies that have literally created financial dynasties that will bless generations. Until the phone stops ringing, I believe I have an obligation to share my skills and knowledge with those who truly care about their family. Our goal is stated in our corporate mission: To help our clients create a Powerful, Productive Posterity.
Recently my oldest son and business partner, Todd, and his wife Camille, were looking at cashing in some of the equity they have in their home. They have six daughters ranging from 10 months to 13 years old. They are not only beautiful both inside and out, they, along with our other five grandchildren are the joys of our life and our most important asset.
Their realtor told them that if they were going to place the house on the market, it would have to be purged, especially the toy room. It was gut wrenching, but they had to perform the surgery. I saw many presents that had previously generated a quick smile of appreciation carted off to the Goodwill. It was the kind of event that gives Disney writers material for Toy Story 5, 6 and 7.
I know the girls appreciated the gifts and even played with them for a while, but the boxes of little used toys being sent to the thrift store reminded me of a program we instituted years ago that actually has true lasting power. A program that will allow you to give a gift that will bless your family in so many ways. A gift that they may not appreciate today, but one that they will bless you for later.
Because of your hard work and good fortune, you are now in a position to financially assist your children and grandchildren by giving them a Christmas gift that will last a lifetime. We call it:
What is this forever Gift For Life? Simply stated, it is a Maximum Funded Family Bank permanent life insurance policy on their life.
For certain, you won’t find a Max Funded Family Bank life insurance policy at the top of any grandchild’s wish list. However, unlike another toy or electronic device, the Gift For Life won’t be something they will ever outgrow. In fact, there are a myriad of reasons why giving a Gift For Life insurance to a child or grandchild makes economic and rational sense.
Who should own each Gift For Life Family Bank Strategy? The answer depends on the circumstances.
As the donor you decide up front. Before I explain the options, let’s first review the current federal gift tax rules:
If you want to control the cash value with the right to withdraw it as needed, you should be the owner and beneficiary of each Gift For Life policy. When you and your spouse pass away you could transfer the policies to your children or grandchildren. The transfer would be considered a gift, but you and your spouse could use both your annual gift allowance of $15,000 and a portion of your $11,400,000 federal estate tax exclusion.
Throughout your lifetime you would call all the shots and decide when the funds are to be distributed to the recipient for this or that. For tuition, a car, equipment for the new dental office, real estate. The uses are endless and the distributions are Tax-Free.
We often we use this approach when a client wants to establish the Family Bank Strategy for himself/herself but for some reason can’t qualify medically.
You make an actual gift of the premium deposit each year, for the specified number of years that you decide, directly to the insurance company for their benefit. Because it is a transferred gift you would lose control over the cash value. Many opt to make this kind of an irrevocable gift; however, they place the funds inside a trust that controls the distributions of both the cash value and the life insurance benefit.
Ron and Clora, are both 75 and retired. Ron was an MD for 40 years and together they have an estate of almost $4 million, of which $1 million is in Ron’s IRA. His IRA Required Minimum Distribution (RMD) will be $43k this year. Stephen, their 55 year old son is married to Janice and they have a son, Ronnie, (30) that married Rebecca two years ago. Ronnie and Rebecca are proud parents of a 3 month old girl, Ruby.
Ron and Clora would like to give their grandson Ronnie (Ron’s namesake) a Gift For Life. They decide to outright gift the $30k annually to Ronnie for 18 years and select a top Max Funded (Stuffed) Indexed Universal Life insurance policy from one of our top A+ carriers.
I know this all sounds too good to be true, but the truth is factual. This kind of multi-generational planning goes on all day, every day and it is real. Company selection is critical and we have done extensive research to find the right carrier and plans for this kind of wealth transfer and wealth creation.
What if Ron and Clora pass away before the 18 years of funding is complete? No problem. Ron and Clora have designated that a small portion of their estate will flow into a trust in the name of Ronnie to make certain that the policy is paid up as planned. An inheritance that he would have received anyway, but this way it will be leveraged into creating millions of dollars for Ronnie and his posterity, who just happens to also be Ron and Clora’s posterity.
Troy, 68 and Vicki, 67 are proud grandparents of Wyatt who just had his 10th birthday. They would like to establish a Gift For Life for Wyatt that will bless him throughout his life. Among other assets Troy has an IRA valued in excess of $800,000. If it continues to grow at 5%, it will be worth $926,000 in three years. His RMD will be $33,795 at that time.
They would like to take advantage of the current favorable tax brackets and get a head start on their IRA distribution now by depositing $10k per year for 10 years into a Max Funded Family Bank for Wyatt. Eventhough the premium deposits would cease after 10 years, the Gift For Life would continue to give throughout his life.
They are deciding between a Whole Life plan and an Indexed Universal Life plan, both being offered by top rated, 100+ year old companies.
Let’s take a look at the results of our study:
Immediate Life Insurance Benefit = $787,751
Life insurance Benefit in 10 years = $1,591,282
Cash and Dividend Value in 10 years = $113,987
Cash and Dividend Value in 20 years = $200,030
Cash and Dividend Value in 30 years = $336,964
Immediate Life Insurance Benefit = $987,119
Life insurance Benefit in 10 years = $1,083,512
Cash Value in 10 years = $113,726
Cash Value in 20 years = $200,986
Cash Value in 30 years = $374,322
Think of the amazing life-long benefits Wyatt’s grandparents are providing him by depositing $100k over 10 years!
With either the Whole Life or IUL policy Wyatt’s accumulation value is scheduled to surpass $200,000 by the time he is 30 and $350,000 by age 40. This is the kind of financial legacy that can only be achieved through permanent life insurance.
Furthermore, with the benefit of time, starting the Gift For Life program early for your children and grandchildren enables the cash in the policies to compound exponentially, all under a Tax-Free umbrella. Your posterity will be able to reap untold benefits throughout their lives from your gift.
When designed correctly with proper planning foresight, and commitment permanent life insurance is a true financial miracle.
As I plan the estates of today’s intelligent affluent, there is one common denominator pattern that I have observed: They don’t just plan for today or tomorrow, they plan for generations – multi-generations!
To see how the Gift For Life would positively impact you and your children and/or grandchildren call for Sara at 1-888-892-1102 and she will schedule an appointment with either me or Todd to discuss your specific family dynamics and how the Gift For Life will create a true financial dynasty for generations.