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

Updated: Nov 2

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

Premium Finance

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:

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