Ten Reasons Businesses Change Ownership

10 Reasons You May Need a Business Transition Plan

Why do businesses change hands? For most closely held business owners, the process of transition is indeed a painful one, having to part with one’s baby and to face the change that inevitably must come once that happens. How we hate change!

The Unique Process of the Wealth Plan

Six-Steps to Successful Wealth Transfer

Our planning process is an intersection of my engineering and financial background, the use of sound accounting principles, and legal knowledge gained over time. My experience with asset valuation issues has helped us create a very effective way to evaluate various wealth transfer strategies and model their impact for our clients over time.

Pay or Play Requirements

Even though the effective date for the application of the penalties for employers has been changed for large employers, the shared responsibility rules continue to be intact with various dates which will become effective based upon the number of employees of each company.

Newly issued final rules provide guidance for large employers who are subject to the shared responsibility (“pay or play”) requirements under Health Care Reform. These employers may be liable for a penalty if they do not offer affordable health insurance that provides a minimum level of coverage to full-time employees (and their dependents), and any full-time employee receives a premium tax credit for purchasing individual coverage on the Health Insurance Marketplace (Exchange).

Six Advantages of Using Life Insurance as an Asset

Six Advantages of Life Insurance

One.  Life Insurance offers a competitive “Rate of Return” on the premiums you contribute.

Two.  Life Insurance is a tax efficient vehicle.

• Life insurance death proceeds are received by your family free of income tax.
• Life insurance cash values grow tax-deferred and can be accessed in a tax-favored manner.
• If owned outside of the taxable estate, the proceeds should not be taxable to estate tax.

Three.  Life Insurance can provide for self-completion of your financial plans in the event of death.

• Life insurance death benefit may offer significant leverage, especially in the early years, and may increase the amount of wealth transferred to heirs.

Four.  Life Insurance as an asset class.

• Life Insurance death benefit is not correlated with other sectors of the investment marketplace, such as equities or bonds, thus is not subject to the same factors that those asset classes are subject.
• By directing a portion of portfolio to life insurance premiums, client may mitigate against market losses.

Five.  Life Insurance may increase tax-adjusted IRR of your portfolio.

• Over the long term, life insurance performs much like a tax-free bond in that it provides a good, tax free rate of return.
• In the short term, life insurance offers significant leverage in the amounts paid out, providing exponential returns on the amounts invested.

Six.  Life Insurance may increase tax-adjusted IRR of client’s portfolio.

• Due to the fact that life insurance is not correlated to other investment sectors, it can increase the overall rate of return to your overall investment portfolio
• When other sectors are suffering from periodic downturns, life insurance affords a steady growth instrument to offset those downturns in other investments

Considerations

• Directing funds to life insurance premiums may reduce the return on your portfolio.
• Potential advantage offered by life insurance needs to be viewed in light of your overall financial situation.
• Your ability to see this plan to fruition is based on continuing premium payments, as required, as well as the claims paying ability of the underlying insurer.
• Your total insurance capacity may be limited by financial underwriting.
• Life insurance qualification generally requires medical and financial underwriting.