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Fiduciaries Have to Get it Right!

Life insurance has always been a cornerstone of estate planning and is usually put into place by a knowledgeable life insurance agent. The attorney places the policy in an ILIT and a Trustee is chosen. In the past it was common for the attorney, a CPA, or a Trust Officer to be appointed as a professional trustee of the ILIT.

However, In the mid-90’s, the Uniform Prudent Investor Act (UPIA) changed the landscape for fiduciaries and put the management of life insurance held in an ILIT under the microscope. It was an unwanted intrusion for fiduciaries who where unfamiliar with the constantly changing new breed of life insurance policies used in estate planning beginning with the introduction of Universal Life insurance in the mid-80’s. Innovation didn’t stop there and new life insurance products seem to be introduced all too frequently. It’s challenging for fiduciaries to keep up-to-date on all the policy changes since the advent of the UPIA. Trustees and attorneys have been successful in getting legislation enacted to limit the liability imposed by the UPIA for the management of the life asset held in an ILIT. The liability may be minimized but responsibility to the best interest of the client is still the heart and soul of the fiduciary. Up-to-date knowledge of the secondary life market is needed to get it right.

Fair Market Value - an Essential Tool for Fiduciaries

A whole cottage industry of ILIT Policy Review companies has appeared over the years to take on the responsibility of reviewing ILIT policies and monitoring policy values. There’s only one problem. Most ILIT Policy Reviews do not take into account the analysis of the Fair Market Value (FMV). Being unaware of the FMV could deprive clients from an undetected windfall that could be applied to other parts of the estate plan.

As a result, Ashar Group has developed a Secondary Market Valuation® (SMV) for life insurance to determine FMV. The Ashar SMV® assists attorneys, CPAs, trust officers, fee based advisors, family offices, RIAs, and client centric advisors by providing an accurate formal assessment of life policy fair market value. This willing seller-willing buyer valuation provides an essential data point for sophisticated estate and tax planning.