Life Insurance

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The American Dream and the Language of Life Insurance

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In 2016, Northwestern Mutual conducted a research study exploring attitudes and behaviors of Americans toward money, financial decision-making and issues that impact long-term financial security in American culture. The study surveyed over 2,600 Americans ages 18 and older.

7 Things You Should Know About EOLI

Employers own life insurance policies on the lives of their employees for various reasons. Often it is to informally fund a non-qualified benefit plan for key employees. Other times it is used to facilitate the transfer of the business at the unexpected death of a key person, another owner, or a shareholder.

Although new rules for employer-owned life insurance policies (EOLI) went into affect over a decade ago, many financial professionals are unfamiliar with them.  The rules have been included as part of the provisions of IRC §101(j) and apply to all policies issued after August 17, 2006. If they are not complied with, the life insurance proceeds at death will be subject to income taxes.

5 Take-Aways from IRS Proposed Regs on 199A Deduction for Pass-Throughs

The IRS issued proposed regulations—all 189 pages– to clarify some of the complexities of its new §199A rule established under the 2017 Tax Act (Tax Act). Practitioners such as CPAs and attorneys, as well as the American public, can make comments over a 45-day period, after which the IRS will assess the comments and finalize the rules.

For a brief overview of §199A, see Highland Capital Brokerage blog articles 2017 Tax Act: An Overview Part 1 and 2017 Tax Act: An Overview Part 2

Although it will take time to digest these proposed regulations, there are 5 take-aways we can share right now. Stay tuned for a more in-depth summary.

Top 3 Reasons to Meet with Clients NOW

We are over halfway through 2018 and financial advisors are well advised to start scheduling appointments post-haste with their upper net worth and higher income clients to discuss year-end planning affected by the 2017 Tax Act rules.

Here are the Top 3 Reasons to schedule client meetings right now:

4 Ways to Pay Premiums Using A Client’s Own Assets

Many high net worth clients need liquidity for which life insurance is the solution. However, when it comes to paying the premium, cash is required.  Often, clients, regardless of wealth, have a hard time giving away large amounts of cash, especially when they consider that they will not see it again.

The Skinny on SALT Under Tax Reform

Tax practitioners aren’t the only ones grappling with how to navigate the new complex rules of the 2017 Tax Act. State officials of high-tax states, too, have been busy considering options to help mitigate the effects of the limitations placed on the federal SALT (state and local taxes) deduction, which is capped at $10,000 under the new law.

6 Takeaways from Cahill Tax Court Case: Intergenerational Split Dollar

The recent Estate of Cahill tax court case gives us a glimpse into the court’s view of intergeneration split dollar arrangements (GSD). In particular, the court focused on, among other things, the valuation of the loan repayment for estate tax purposes, as well as the appearance of the transaction as a vehicle for below market transfers to family members. Although the tax court did not issue a summary judgement and the case will now move to trial for a decision, the comments of the tax court are telling.

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