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Writer's pictureJacob L. Hartz, J.D.

Success Story of the Month: Life Insurance Leverage for an Illiquid Estate

Updated: Nov 2, 2023

Quick Facts

  • Age: 42

  • Client goal: To provide predictable liquidity at death for estate taxes

  • How the client was found: Client is a referral from an estate planning attorney

  • Income / Net-Worth: $60M net worth, $50M of which is real estate holdings

  • Health: Excellent

Concept Presented

Premium Finance

Problem(s) Solved

  • Client’s estate will still owe significant tax bill upon his death.

  • Majority of his estate is illiquid real estate assets that may be hard to sell for a fair price in a small timeframe.

  • Trust-owned life insurance provides immediate, predictable, tax-free cash at his death.

  • The trust buys those assets out of his estate, allowing the estate to pay the tax bill, and keep his real estate holdings intact and in the family.

  • Financing premiums significantly reduced the amount of out-of-pocket cash the client needed to fund the policy.

  • Increased death benefit IRR and retained capital.

  • The trust-owned real estate pays annual loan interest, eliminating potential gift tax.

Key points we have spoken about:

  • Liquidity

  • Estate Planning

  • Gift Tax

  • Trusts

  • Estate Taxes

  • Premium Financing

The client is a happy, protected family. "Give me a lever, and I'll move the world." - Archimedes

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