Estate Planning and Protecting Your Assets

The Problem
In 2008 the estate tax exemption for each individual is $2 million dollars worth of assets. This includes your real estate property, stocks, bonds, retirement, cash accounts as well as many others. When someone passes away federal estate tax law allows an unlimited amount of property and money to be passed to the surviving spouse completely free of taxes. When the surviving spouse passes away the children (or beneficiaries) are not taxed on the first $2 million dollars worth of property and assets that are left behind. However, any amount over the $2 million dollar threshold will be taxed at 45%. The Federal tax chart shows the scheduling for the estate tax in the years to come. In the year 2010 the estate tax is completely repealed to an unlimited amount of tax exemption and there is a zero estate tax. If you do not plan on passing away in the year 2010 you must begin planning for the future and the protection of your assets. In 2011 the estate tax drops back down to $1 million dollars of exemption.

There is a sunset clause in this agreement that will reset the tax exemption to $1 million dollars in the year 2011 and for the years to come.

The Solution
As shown in the Federal Estate Tax Exemption Chart your assets may not be completely covered for the future. The way to cover all of your assets is to replace the taxable amount of assets with life insurance. The death benefit is 100% tax free and should be designed in an Irrevocable Life Insurance Trust often referred to as ILIT. When the surviving spouse has passed away the children or beneficiaries have 9 months to come up with the cash needed for the estate taxes for all property and assets valued over the exemption. An ILIT will provide the cash needed to pay for all estate taxes so that your beneficiaries do not have to fire sale all of your property in order to come up with the cash needed to pay the government. The proper design on this trust is needed so that it is separate from your estate when you pass away and cannot be counted for as part of the exemption amount. The life insurance is tax free but you will want it placed in the ILIT so that it does not count towards your estate value. The insurance proceeds will be in the ILIT and give your heirs the opportunity to pay off the taxable amount of estate taxes without having to risk losing any or all of your properties. The ILIT will be the premium payer as well as the beneficiary of your life insurance.

Why Cox Capital Corporation?
Cox Capital Corporation has provided hundreds of millions of dollars worth of coverage to key executives as well as individuals. Our resources as well as our relationships with insurance companies across North America and Europe are what set us apart. We are partnered with the most powerful insurance companies in the world. We pride ourselves in our ability to get the “uninsurable” insured. Many of our clients have had serious health issues in their past. These serious issues involve heart attack survivors, multiple sclerosis, diabetes as well as late stage cancer survivors. Our office has been able to place permanent life insurance on all of these clients. Estate planning is a necessity for many of our clients. If you feel that you may need this type of planning please do not hesitate to contact our office today.

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