Asset maximization made easy Blog added by Barry Goldberg on February 4, 2013
Barry Goldberg

Barry Goldberg

Florham Park, NJ

Joined: January 13, 2012

Asset maximization — that sounds attractive to me. Heck, I’d like to maximize the value of all my assets, but the truth is, I am probably not doing so. Why? Because I don’t know how. I am not familiar with the different transfer and taxation rules that apply to my assets and how quickly their value can be eroded.

One of the simplest and easiest ways you can add value to your clients is by going through their current assets and asking the question, “What is this asset earmarked for?” When you have clients that are not using the asset for day-to-day living expenses and want to transfer the asset to their children, then they have just opened the door for you to add value.

What most people don’t realize is that many of the assets in their portfolios are subject to income and estate taxes upon their death, which can quickly decrease the value of that asset by 50 percent or more. Can you imagine thinking you are giving $500,000 to your children only to find out that what they really received was $225,000?

Fish where the fish are and you immediately increase your chances of catching one. The clients who would be a fit for this strategy are ones who:
  • Have fixed income assets with poor returns.
  • Have deferred annuities that they no longer need for retirement income.
  • Have IRAs or qualified plan assets they don’t need for retirement income.
  • Do not need their Social Security income.
So, here are the basics of how it works. Let’s keep it simple with three easy steps:
    1. Sell an under-performing or under-utilized asset from your portfolio.

    2. Use the proceeds to buy an immediate annuity.

    3. Use the income from the annuity to purchase a life insurance policy with the balance of the income used to meet your client’s income needs.
Implementing this strategy will ensure that your clients' assets will not be eroded by estate and income taxes, ultimately allowing them to maximize the benefit to their heirs.
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