Blog2021-02-22T22:08:51-06:00

Now Is a Good Time for TOLI Trustees to Talk to Their Clients

An online survey about life insurance found 33% of life insurance policy owners do not understand how their policy works. (1) The other 67% probably think they know how it does, but I imagine they would appreciate a refresher lesson on how it actually works. Even if they do understand how it works, do they understand how a decade of low interest rates and equity market volatility affected their policy? TOLI trustees should be reaching out to grantors to explain to them how their policy works. Doing so provides the grantor with greater clarity about their policy and gives

The Many Duties and Responsibilities of ILIT Trustees

Trusts have long played an essential role in estate planning for many individuals and families.  The assets held in trust can vary from real estate to stocks, bonds, insurance policies, jewelry, and other collectibles.  This deep-dive will focus on trust held life insurance policies, which can be considered a special asset class. For some, trust held life insurance has become a black box full of mysteries and administrative nightmares. Why Are Trust Held Life Insurance Policies so Difficult to Manage Life insurance policies are complex and often misunderstood financial instruments that require active management by the policy owners. These

Directed TOLI Trusts – the Good, the Bad and the Best Solution

After over a decade in the TOLI (trust-owned life insurance) business, we are aware of trends that come and go. One trend we are seeing more and more lately is the use of directed TOLI trusts. Directed trusts divide the responsibilities of the trust into two distinct tasks – administration and asset management. Directed trusts are not new in the industry. Once, all trustees retained full authority over both the administration of the trust and the management of the trust asset, but as the trust and financial services world evolved, responsibilities blurred. Today it is not uncommon to have

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Life Insurance Based Dynasty Trusts Provide Much More Than Just Tax Advantages

Life insurance trusts today have lost some of their allure with the raising of the federal estate tax exemption amount. However, a specific type of life insurance trust can have much more than just tax advantages – advantages that last for generations. Most of us have read stories about the dissolution of family wealth over a generation or two. This can occur for several reasons, mostly because the family capital is not replenished because of bad business decisions or personal financial mistakes. There is a tax-advantaged vehicle that can leverage the current high tax exemptions for high net worth

Insurance Trusts – Are Your Clients in Good Hands?

The single largest personal investment for couples between thirty and sixty years of age is often their personal home.  The mortgage payment on a $400,000 home is $2,416 a month, the national property tax rate average is 1.19%, and the average homeowner insurance cost is $2,300.  When you look at the total investment over the span of 30 years, it is substantial. By comparison, our clients who have irrevocable life insurance trusts will make similar or greater investments between ages sixty and ninety as a part of their estate and succession plan.  According to ITM Twentyfirst Services and the data collected

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