Think Outside The Box

Author: Wealthsmart Solutions | | Categories: 401K , Annuities , FAFSA , Financial Advisor , Insurance , IRA , Retirement Calculator , Retirement Planning , Tax Calculator

Financial Advisors Columbus Ohio

Is the Step Up In Basis tax benefit going away? The newly proposed tax laws, if passed by congress, will eliminate (Step up in basis) the ability to pass assets to heirs without realizing capital gains.

In addition, the long term capital gains tax is proposed to increase to 39.6%. Approximately double the current rate, making the following technique to wealth building much less attractive.

Currently, wealthy people who need cash can take out loans using stock as collateral, rather than selling shares, which would trigger a tax bill. The technique allows the wealthy to fund their lifestyles, then pass their assets to their heirs without ever realizing capital gains tax.

You might be wondering, what adjustments can be made to deal with the changing tax laws.

Thinking outside the conventional Wall Street box, consider cash value life insurance to hedge against the proposed tax increases.

Cash Value Life Insurance is a strategy used to create a source of tax free cash flow while living and transfer wealth tax free at death.

Many think of life insurance solely used to provide a tax free benefit for heirs. But a properly structured IUL policy allows the owner to access policy cash value while living, as a tax free loan against the death benefit. This provides the owner tax advantaged cash flow to fund their lifestyle.

The Index strategy used to produce potential growth provides a 0% floor in the event of market volatility (principle protection). A guarantee that stocks do not provide.

And it gets better for high income earners who qualify for bank financing of these policies. Kia-Zen

A bank will loan up to 3 times the client’s contributions. There are no contribution limits and no personal loan guarantees. Leveraging the banks money increases growth potential, provides more tax preferred cash flow and increases the death benefit which will eventually transfer tax free to your heirs.

The strategy is not suitable for everyone, but worth a close look if increasing taxes and market volatility are a concern.

A couple of good resources that speak directly to the benefits of Cash Value Life Insurance: CPA, Best SellingAuthor, Ed Slott -
Author, Tony Robins -
1. Money Master the Game  
2. Unshakeable

If you’d like more information about the Kia-Zen plan, don’t hesitate to contact me directly @ 614-370-3055.

I’ll give you a secure web page link that provides additional detail and a calculator that allows you to estimate your potential benefits in the privacy of your home.

Dave Watkins

Protecting Americas Wealth