As of December 31st, 2016, the Federal Government will be implementing changes to Life Insurance policies. These legislative changes will not only result in higher insurance costs, but will also affect the amounts that one can deposit into the investment feature within a Universal Life Policy. Consequently, if estate planning is within a five year time horizon, we urge you to engage us to better understand the implications of these changes and how they will affect your estate planning solutions moving forward.
Some of you may not need life insurance for estate planning purposes. Perhaps you already have sufficient insurance for estate planning. However, in light of recent increasing tax rates, you may be looking for a tax efficient investment vehicle. If this applies to you, it is possible to structure a tax exempt life insurance policy to minimize the insurance costs and maximize the tax sheltered investment opportunity. When the investable assets are in a corporation, this strategy can effectively be used to extract corporate value on a tax free basis. Simply put, all deposits in the policy and growth of the investment solution will ultimately be extracted as a tax free dividend.
Finally, given the volatility of markets, it is important to choose the appropriate investment vehicle. In order to generate a more predictable return which will closely reproduce the projected illustration of returns, consideration should also be given to less volatile investment strategies which are non-correlated to the stock and bond market but which still may provide favorable returns.
For more information, please contact your Zeifmans advisor or
Steve Roth.
Sincerely,
