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Happy Holidays! 2007 was a year of exciting change here at The Potomac Group. In this spirit, we pause to say thank you to those who contributed to our success this past year. We sincerely appreciate your fellowship, support, loyalty, and trust for they are, and will continue to be, the foundation of our business. We hope the upcoming year holds many great things in store for you. Best wishes for a new year of health, happiness, and prosperity. Due to the New Year holiday, our weekly newsletter will not be published next week, but will return on Monday, January 8, 2008. See you in the new year!
ING
Phoenix
Principal Life
Prudential
Case of the
Week:
A life insurance policy owned by an Irrevocable Life Insurance Trust (ILIT) is one of the most cost effective ways to preserve wealth and reduce the impact of estate taxes. The implementation is fairly simple: set up an ILIT, let the ILIT apply for and own a life insurance policy, and then the Grantor makes gifts to the ILIT each year so the trustee can pay the premiums. All in all, a fairly simple process – right? Simple – yes; inexpensive – maybe not. Our favorite tax code includes a creature called Gift Taxes. Anytime we want to make a gift to someone else, the IRS wants to tax it at a top rate of 55% – subject to limitations. Each of us is able to make annual gifts to any number of contributions, as long as the amount to each contribution does not exceed $12,000 per year. The $12,000 Annual Gift Tax Exclusion is scheduled to increase in $1,000 increments according to inflation. Once the amount gifted to any one individual exceeds $12,000 in a calendar year, gift taxes may be payable. Congress decided that we should also each be able to give away up to $1 million during our lifetimes. It doesn’t matter whether this amount is given to one person or a large number, the only thing that matters is that the $1 million is cumulative, and once it is exceeded, gift taxes become payable. Gift taxes can become a major issue when gifting relatively large annual premiums to an ILIT. If the number of trust beneficiaries is limited, it only takes a few years for six-figure premiums to fully consume the $1 million lifetime exemption, making ILIT-owned life insurance more expensive. The Potomac Group Gift Tax Calculator can measure the impact of gift taxes on a given premium stream. The Calculator automatically adjusts the $12,000 Annual Exclusion for future inflation and it allocates the $1 million lifetime exemption of the client and the client’s spouse, if split gifting is being utilized. The next time you request a life insurance proposal, ask your Potomac Senior Sales Consultant or Advanced Sales Director to use the Calculator to provide you with a gift tax illustration. You will need to provide the number of Annual Exclusion beneficiaries of the client (and spouse, if applicable), as well as the amount of prior lifetime taxable gifts the client and/or spouse has made.
The Potomac
Group Gift Tax Calculator can also illustrate the impact of
an early death so be sure to communicate that as well when you
submit your request. |
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Special Report (December 2007)
Teleconference:
Ask the Doctor: The Baby Boomer Market
Teleconference:
John Hancock Presents Fruits and Nuts
Teleconference:
Genworth: Corporate Term Carve-Out
Call The Potomac Group at |
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For Producer use only - not intended for use in solicitation of sales to the public. Products and programs offered through Crump are not approved for use in all states. As a Crump producer, you will receive emails occasionally to update you on Crump services and carrier news. In the future, if you no longer wish to receive these email updates, please click here to unsubscribe. 12.07 TPG.144.1 The Potomac Group, 6550 Rockspring Drive, Suite 320, Bethesda, MD 20817 |
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