Few people are aware of the opportunity that exists for the affluent individual considering tax efficient planning strategies. Geared to those individuals 50 years or older having a net worth of $10 million or more, clients can leverage "borrowed" money with specific life insurance
solutions and efficiently solve a wide variety of estate planning needs.
Clients can lend money to a trust for one to three years and lock in the short-term Applicable Federal Rate (AFR) of 0.23 percent or lend for three to nine years at the mid-term AFR of 0.93 percent. This solution may show attractive to those individuals who have used up their gift exemptions
, don't want to use their gift exemptions, or don't have enough Crummy recipients for an estate planning solution.
- Owner keeps full control via a promissory note
- The loan money is moved outside of the client's estate
- The client maintains access to the loaned money
- Death benefit is free of income and estate taxes