Last Tuesday I attended a networking group for women at Zin on the lake in Westlake Village. Since we have been having mild summer weather it was a wonderful choice of locations to have a drink and mingle with the other ladies who attended.
I was listening to a conversation between one of the ladies who announced to the Estate Planning Attorney that she had recently learned there is a death tax. I like to think of it as an Estate tax as it is usually paid by very large estates. She wanted to know if there was a way around it. The Attorney explained that this year (2010) the tax on estates is nil and until Congress does something it may be based on assets over $1 million in 2011. She could reduce her estate by gifting $13,000 to whomever she wanted to.
The conversation came to mind over the weekend.
The Attorney never mentioned that one of the options available to cover the tax is having an Irrevocable Life Insurance Trust that would purchase life insurance to cover the amount of estate tax that might be owed at her death. If the premiums are large she can set up the trust with gifts to her kids or grandkids that would go to pay the premium.
An attorney knowledgeable in Irrevocable Life Insurance Trusts would need to be consulted along with a CPA and a knowledgeable insurance agent.
SandraCherry, August 9th 2010 |
Tags: Estate Tax, Financial Planning, Life Insurance
Posted in Estate Planning, Financial Planning, Insurance
Some years ago I was competing with another agent for a life insurance policy for a mutual friend. He was a captive agent, he could only write a policy for the company he was associated with. Being an independent agent I shopped for the best policy at the most affordable premium for her. There was a substantial difference in the annual premium. Needless to say I wrote the policy.
Besides the difference in premium the other agent did not have the facts needed to make a quote for the prospect. His quote was for more insurance than she actually needed. The quote I provided was for the amount that her estate planning attorney recommended she get a policy for.
When you’re considering life insurance products, it’s important to choose an agent or broker who can help you. Buying insurance can be complicated and confusing. The key to buying the right amount and the right type of policy at a good rate is a good agent or broker. You should choose one who:
• Explains in terms you can easily understand, all of the issues and options available to you with your planned use of life insurance in your financial future.
• Understands your financial situation and your feelings regarding risk, your income and estate tax bracket, financial assets and liabilities, and your own personal situation.
• Doesn’t pressure you into decisions, but works with you until you come to a decision on your own about what’s best for you and your family.
• Helps you with periodic reviews of your policies and portfolios to ensure that your products continue to meet your needs and current circumstances.
• Is licensed and professionally qualified by the Dept. of Insurance where you reside.
If you want my assistance you can reach me by phone at 818 706-3745 in California or by email: Sandra@Insurance-California.com.
Sandra Cherry, PFP CA Insurance License #0B45111 (805) 374-1744
www.SandraCherryFinancialPlanner.com
SandraCherry, January 26th 2010 |
Tags: Insurance, Life Insurance, Sandra Cherry
Posted in Insurance
