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Changing Estate Tax Needs


March 18,20 | 5:30 pm

 

For many, the idea of estate planning refers to a will, a written document designating your possessions to the people or organizations you care about most. For others, an estate plan is an annuity or life insurance policy to protect assets for the next generation. However, the Tax Cut and Jobs Act of 2017 significantly lowered the estate tax exemption, causing some policy owners to no longer need their policies for estate planning needs. Instead of surrendering or lapsing the life insurance policy back to the carrier, consider a life settlement. 

What is a life settlement?

A life settlement is the sale of an existing life insurance policy to a licensed institutional buyer for a value greater than the cash surrender value and less than the death benefit. Annuities and life insurance can comprise a significant amount of your estate. However, with the lower tax rates, it could be wise to unlock the value of your life insurance assets and apply them to meet other needs.

 

How a life settlement can help your estate

The value created from a life settlement can be utilized in any way the insured wishes. At Ashar Group, we have seen the insured use the money to fund other aspects of planning or make memories with their loved ones. Another option is to donate all or a portion of the funds to a charity, fulfilling a giving requirement in the insured’s financial plan and allow them to see the gift put to use while living. Furthermore, you can place the funds generated from a life settlement in a trust. Trusts are like wills, but they avoid state probate requirements and creating a trust saves on estate taxes.

 

Ashar Group serves as an independent resource to the financial planning community by providing expertise in life insurance appraisals, life settlement transaction services, and longevity analytics for advanced planning applications. Our proprietary auction process forces competition amongst licensed institutional advisors to generate fair market value for our clients’ policies. Contact us today to see if a life settlement is the right choice for your estate plan. 

 

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