Deferral of estate taxes: calculating the benefit and the funding
Article Abstract:
Owners of closely held businesses that anticipate estate taxation at the highest levels can reduce estate taxes by deferring them under IRC section 6166 and funding the tax payments with life insurance. Section 6166 generally provides that installment payments may be used if a closely held business makes up more than 35% of the estate's assets. The interest deductions available from the installment plan are then used to reduce the estate and the taxation on the estate. Life insurance can be used to fund the estate tax installment payments.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1997
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Using qualified plan money to purchase life insurance
Article Abstract:
There are various ways open to use qualified benefit plan dollars to pay the premiums on life insurance policies and avoid estate taxes on the death benefit if certain conditions are met. One way is a new Qualified Plan Insurance Partnership, which would satisfy prohibited transaction rules under ERISA and avoid valuation, subtrust and Individual Retirement Account life insurance ownership difficulties. Several methods to fund the life insurance are presented along with the requirements under ERISA.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1996
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Interest rate reality and the relevance to the sale of life insurance
Article Abstract:
Interest rates in the 1990s are considered low and yet are high over a 10-year period. Therefore, support for variable life insurance products over fixed-rate products is growing while clients are increasing their willingness to take risks to gain the higher rates of return. The demand for interest-sensitive insurance products has increased because fixed-rate product returns are projected as lower than those with variable rates.
Publication Name: Journal of the American Society of CLU & ChFC
Subject: Law
ISSN: 1052-2875
Year: 1995
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