Corporate Benefit Liability Funding

Every company has certain benefits which it provides to its key employees which create the need to find a means of funding that liability. For the most part, companies are looking for tax efficient ways to fund their benefit liabilities and a means of being able to finance those liabilities without significantly impacting the financials of the company.

Financing benefit liabilities, such as nonqualified plans and other benefit liabilities, allows companies advanced options to balance the rising costs of their benefit plans with a greater return on their investment if effectively planning for—and minimizing the impact of—benefit distribution. Shareholder and accounting management practices make it increasingly beneficial to fund plans in today’s market. With many ways to establish an informal funding mechanism for nonqualified benefit liabilities, funding options are frequently combined to provide the best outcome for the specific needs of a corporate client. SSG provides expertise and analysis to facilitate an appropriate informal funding decision. Below are a few popular informal funding concepts.

• Corporate owned life insurance (COLI) and bank owned life insurance (BOLI) with cash value build-up are often selected to target matching plan liabilities. COLI and BOLI buyers benefit from annual reviews that evaluate their life insurance policies for appropriate strategy, structure, pricing and competitiveness. Many times this doesn’t happen and corporate buyers are hard pressed to find an expert committed to ongoing policy review. SSG provides COLI audits to analyze carrier strength, pricing efficiency, and expenses, as well as compare investment management and alternatives. The corporate buyer will receive a full analysis of their current product(s) and strategy effectiveness, along with recommendations and alternatives.

What is oftentimes discovered is that corporately owned life insurance (COLI) can and does provide an economical alternative to funding those liabilities in some other manner.

• Annuities often complement an investment plan by providing a stream of steady income for an employer or executive. Investments in an annuity can be made in lump sums or over a period of time, and payments can start immediately or at a later date. Offering a range of options, annuities can also be used for tax-free income, customized, continual payments for the length of the claimant’s life, payments to a named beneficiary, or as settlements for corporate plans.
• Other informal funding options may include mutual fund investments. Mutual funds create the option to fund a plan with a matching asset that will grow over time to offset the payment obligation.

The availability of so many options for financing benefit liabilities enables companies to offer more competitive benefit plans while efficiently planning for distribution. SSG has the expertise to evaluate those options for you and to provide you with the means of making an informed choice.

Harvesting Wealth from your Business

You have painstakingly built your business over time to the point where you are now. And businesses are like safes – you put money in them, you retain earnings to grow them, and then, you look forward to the day when you can open that safe and take out some of the money that you have patiently put their over time.

But, one day you might just want to harvest some of your accumulated wealth in your business. The question is how do you do it?

What do you plan to do with your business when you are ready to get out of it? Will you transition it to family members? Or, do you have a management team who wants to purchase the business from you? Or, do you have an outside buyer who has expressed interest in your business? Each of those alternatives has its own set of issues, with the financing part of it being one of the major issues which must be addressed.

If you transition your business to family members, not only are there family dynamics to take into account, but there are tax issues which must be addressed.

If you transition your business to a management team, will they have the wherewithal to finance the purchase without some kind of seller financing? Will they be able to secure the financing needed?

If you sell your business to an outside third party, even if you do not have to take sellers’ notes, there will be some sort of participation that they will require – typically, you or your family will be asked to keep a percentage of the business and/or stay on to manage it for some time.

But there is an alternative which could allow you to accomplish your transition goals, and at the same time, harvest some wealth from your business, possibly on a tax favored basis. And, this alternative could help you in accomplishing your goals.

We have helped some of the top companies and families in this region to establish business transition plans which work for them. Could we help you? To see an example of how this can be accomplished, please call us at (318) 425-0406 Ext. 103, fax us at (318) 226-1006 or email us at jgriffin@ssgfingrp.com. We look forward to showing you what can be accomplished.

Federal Estate Tax Repeal

How Possible Changes to the Federal Estate Tax Policy Can Impact You

There is much speculation in the press and elsewhere about President-Elect Trump and the next Congress (115th) enacting full federal estate tax repeal. This speculation is largely based upon the public statements of Donald Trump as well as longstanding Republican support for estate tax repeal. But, it is important to understand the realities of today’ political climate and what is being proposed to take its place.

Business Transition Continuity Issues and Solutions

Planning is Key When Dealing with Business Transition Continuity Issues and Solutions

Are you prepared if something happens to you or a co-business owner, or a key member of management? If the answer is no, it is time to get serious about business transition planning. After all, successfully protecting your business and long-term family wealth starts with a solid business transition plan.

Wealth Transfer Legacy Issues and Solutions

Planning is Key When Dealing with Wealth Transfer Legacy Issues and Solutions

As a visionary entrepreneur or a talented professional or a brilliant executive, you work for decades creating, accumulating, and multiplying family wealth. The key to protecting that wealth in a way that leaves your legacy intact, and through a process that you control and design requires a solid strategy to address wealth transfer legacy issues and solutions, and time for advanced planning.

The Gift of a Lifetime Wealth Management Strategy

A solid wealth transfer plan can provide a gift-giving opportunity for grandparents that can last for the lifetime of their grandchild and can be a legacy asset, which will be kept and utilized throughout the lifetime of that grandchild.

Employee Benefits Issues and Solutions

How to align the security needs of employees with the profitability needs of employers.

Both, employee benefits issues and solutions are there by design, as employee benefits can and should be a valuable alignment tool, but most employers administer them as a necessary evil. The programs can range from group life insurance to group health insurance and even encompass diverse voluntary benefits geared to your employee demographics.

The Value of a Life Insurance Policy Audit

How to Find Hidden Assets in Your Life Insurance Portfolio

For anyone who has purchased life insurance over the years, a life insurance policy audit is an extremely important part of protecting financial assets and overall wealth. Many times, life insurance policies are purchased and tucked away, not seeing the light of day until they are needed.

Unlocking the Vault – Business Transition Planning

What does Your Business Transition Plan Look Like?

As a business owner, you are constantly involved in the process of adding value to your business by nurturing customers, maintaining your bottom line, and taking care of the day-to-day operations. However, if you are like most business owners, you have likely given little thought to the important task of unlocking the vault of business wealth through business transition planning.

Large Estates Need Life Insurance Liquidity

Large Estates Need the Liquidity That Life Insurance Can Provide

It has long been known that life insurance is a valuable tool in estate planning. For every person who has accumulated or inherited a substantial estate, there is the inevitable discussion about dealing with the estate tax issue. It is very real to those who have accumulated estates of $10 million or more, and the tax can be a deal destroyer if not dealt with. That is why many planners will utilize any and all available strategies to avoid paying high taxes. But ultimately, there must be a plan to pay the tax that must be paid.