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Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5240
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
May/June 2019
The Gift That Keeps on Giving
While it pales in comparison to the excitement of giving and receiving smartphones and tablets as gifts, the gift of life insurance can have a much greater impact over time. From gifting an in-force policy to making annual gifts meant to pay premiums, you can have a lasting impact on the financial fortunes of loved ones through life insurance.
Gifting Premiums
Giving annual cash gifts to as many people as you want is a great way to reduce your taxable estate, and by itself it can also provide a means to provide future wealth, especially if those receiving the gifts put it toward insurance on your life that names them as beneficiaries. Note here that you can’t force the gift recipients to buy life insurance. With proper structuring and the help of qualified financial and tax professionals, your gift can help youleave loved ones a financial legacy after you’re gone.
Irrevocable Trusts
Another way to leave estate-tax-free life insurance to loved ones is to establish an irrevocable life insurance trust, with terms saying your gifts to the trust are for life insurance premiums on your life and for the benefit of your beneficiaries. There will be a cost to establishing this trust, as well as a loss of control outside the trust’s written terms, but this gifting method can help you leave more behind.Existing Policies
One more way you might consider leaving life insurance to loved ones is to gift an existing policy, either directly to loved ones or to an irrevocable trust for the benefit of the trust’s beneficiaries. This transfer comes full of potential tax pitfalls, which makes working with dedicated professionals essential. For example, transferring a policy whose current value exceeds the annual gift tax limit could trigger taxes. Transferring a policy that has had a loan taken against it can also cause tax complications. Also, beneficiaries may not receive the full tax benefits of the gift of life insurance — or any asset, for that matter — if the transfer occurs less than three years from the donor’s death. Talk to your insurance and tax professionals who can help you to avoid complicated surprises.GE-2314425c (11/18)(Exp. 11/20)
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Securities offered through Equitable Advisors, LLC (NY,NY (212) 314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC-registered investment advisor. Annuity and insurance products offered through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC; in Utah as Equitable Network Insurance Agency of Utah, LLC; and in PR as Equitable Network of Puerto Rico, Inc. Equitable Advisors and Equitable Network are affiliated companies and do not provide tax or legal advice.
R.I.C.H. Planning Group, LLC is not owned or operated by Equitable Advisors or Equitable Network. Equitable Advisors and Equitable Network are brand names for Equitable Advisors, LLC and Equitable Network, LLC, respectively.
GE-4833845.1 (7/22)(Exp. 7/24)
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