The Key to Planning for an Uncertain Future – Flexibility

This opinion is part of our monthly Life Insurance News Brief. To receive insight and expertise on life insurance and disability-related topics, sign up to get on the list.

June 2017

The ability to be proactive and strategic rather than reactive is the objective and essence of a successful planning process. When our clients create estate and succession plans, they are limited by the information at hand in this moment…whether that be their current family and business environment, recently updated IRS guidelines, acceptable planning techniques or current estate and income taxation regulations. Almost all plans will need to extend over numerous decades and multiple generations. Change is not probable, it is inevitable and that is why liquidity and the flexibility it provides will never go out of style.

At Rose Street Advisors, we have the unique opportunity to work alongside our clients and their advisors (attorneys, CPAs, etc.) to best protect their family and business in order to create a blueprint that meets their planning objectives. As a flexible instrument, life insurance provides unencumbered, tax-efficient liquidity when needed most. Life insurance is used as a tool to provide funds needed to:

  • Help divide an illiquid asset among children; such as a family business, farm or cottage when interest and ability to manage the asset is varied, but a desire to be “fair” is of utmost importance.
  • Create a guaranteed market for an owner’s business interest so that a spouse is not dependent on the future success of a business. It can also provide a surviving business partner with the tax-free liquidity necessary to acquire the deceased partner’s stock.
  • Provide funds that can be used to pay a federal estate tax that comes due within 9 months following the passing of a individual with a large estate exceeding the current estate-tax exemption amount.
  • Compensate a key employee’s family in full when a deferred benefit has been promised to the deceased.
  • Provide working capital to a business needing to replace a key member of a company who has unexpectedly passed.

Are you facing an uncertain future? We all are, and the only way to get ahead of it is to plan for it. If you would like to speak with us regarding your situation or the use of life insurance in your planning process, please contact us.

Flexibility never goes out of style

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This information has been provided by the Association for Advanced Life Underwriting.