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For rep/agent use only. Not for further distribution.

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Presentation on theme: "For rep/agent use only. Not for further distribution."— Presentation transcript:

1 For rep/agent use only. Not for further distribution.

2 The Dolgoff Plan is a proven alternative to traditional nonqualified plans. No other NQ plan provides a business with current and deferred tax deductions that can exceed the corporate contributions — and provide exceptional flexibility. The Dolgoff Plan For rep/agent use only. Not for further distribution.

3 History

4 STEP 1: The Corporation moves money from cash on hand to a brokerage account. The money used will always be after tax dollars – since this is a nonqualified program.  The annual corporate contribution is used to purchase mutual funds or other investments/assets allocations.  This asset is always owned and controlled by the corporation at all times. For rep/agent use only. Not for further distribution.

5 STEP 2: Using the full corporate account value as collateral, the corporation leverages the account and takes a margin loan.  The brokerage firm lends its’ own money to the corporation, the full value of the asset always stays invested.  This asset is always owned by the corporation For rep/agent use only. Not for further distribution.

6 STEP 3: Using the loan proceeds, the corporation provides the participant a compensation bonus – Section 162.  This is a tax deductible expense for the corporation.  The corporation sends the bonused compensation to a life insurance company.  The insurance contract is typically a whole life policy.  The policy is owned immediately by the participant.  The company retains no ownership of the policy. For rep/agent use only. Not for further distribution.

7 STEP 4: The participant has a tax liability on the full premium. A portion of the annual premium may be surrendered – not borrowed, to pay for the participant’s tax liability.  The portion of the premium being surrendered comes from a paid up additions rider.  Thereby giving the participant a policy with immediate cash values, at ‘no out of pocket cost’. For rep/agent use only. Not for further distribution.

8 STEP 5: The corporation is assessed an interest charge for the margin loan – which is a second tax deductible expense.  The corporation is using the borrowed money for compensation – not to purchase a life insurance policy. For rep/agent use only. Not for further distribution.

9 STEP 6: At the specified retirement age, or a specified date of distribution, a percentage of the net asset value of the investment account is distributed to the participant as supplemental retirement income.  This is a tax deductible business expense for the corporation. For rep/agent use only. Not for further distribution.

10 STEP 7: In addition to the life insurance death benefit, the life insurance contract can be used to supplement retirement income on a tax favored basis.  As long as the policy is not surrendered, cash values can be taken against basis or as a loan with no income tax due. For rep/agent use only. Not for further distribution.

11 The Dolgoff Plan provides the Corporation with:  Current and deferred tax deductions which can exceed the Corporate contributions  No limits on contributions  Full control of plan assets owned by the Corporation — AT ALL TIMES!  No IRS filings or approvals  Ability to stop plan if necessary  Ability to choose participants  Retaining Key People — Golden handcuffs For rep/agent use only. Not for further distribution.

12 The Dolgoff Plan provides the Plan Participant with:  Two streams of income either at retirement or a specific date  Participant has immediate ownership of life insurance policy  No penalties for early distributions from the investment account  May provide supplemental income in the event of disability  No ‘out of pocket’ cost to participant For rep/agent use only. Not for further distribution.

13 The Dolgoff Plan will work in:  C Corporations  S Corporations  Partnerships  LLC’s* *That are taxed only as a C-Corp, S-Corp, or Partnership For rep/agent use only. Not for further distribution.

14 The Dolgoff Plan prospects: Corporate clients who are:  Established  Financially Healthy  Looking for additional tax deductions  Want to provide an additional plan on a selective basis – even if it is just the owner  Need to Customize a plan to fit its’ needs  Avoid the heavy cost of traditional NQ plans For rep/agent use only. Not for further distribution.

15 The Dolgoff Plan has been successfully used for:  Business Succession Planning  Supplemental/Retirement Income  Retain Key People  Buy/Sell Agreement funding  Estate Planning  Charitable Giving For rep/agent use only. Not for further distribution.

16 Questions? For rep/agent use only. Not for further distribution. 121287 exp. 6/15 Investors should consider their individual risk-tolerance and investment goals. Remember, margin borrowing increases the level of market risk, so the value of the investments can go down as well as up. The client must repay the margin loan, regardless of the underlying value of the securities purchased. Maintenance margin requirements may change at any time without prior notice. If the equity in the client's account falls below the minimum maintenance requirements, the client's B/D will issue a maintenance call requiring the client to deposit additional cash or acceptable collateral. The client is not entitled to an extension of time on a margin call. If the client fails to meet a maintenance call, the client's B/D may be forced to sell some or all of the securities in the client's account to protect its loan, with or without the client's prior approval. This material is for informational purposes only and is not meant as Tax or Legal advice. Clients should consult with their individual tax and legal professionals prior to entering into such transactions. Highland Capital Brokerage does not offer tax or legal advice. All guarantees are based on the financial strength and claims paying ability of the issuing insurance company, who is solely responsible for all obligations under its policies. Loans and withdrawals may generate an income tax liability, reduce available cash value and reduce the death benefit or cause the policy to lapse. Mutual funds are sold by prospectus only. For more information including expenses and charges, please read the enclosed prospectuses. Please carefully consider the investment objectives, risks, charges and expenses before investing or sending money as these factors will affect returns. The prospectus contains this and other information about the investment. Higher potential return generally involves greater risk, short term volatility is not uncommon when investing in various types of funds, including but not limited to: sector, emerging markets small & mid-cap funds. Risks for emerging markets include risks relating to the relatively smaller size and lesser liquidity of these markets, high inflation rates and adverse political developments. Investors should carefully assess the risks associated with an investment in the fund. International fund unit values and returns will fluctuate with market conditions, currencies, and economic and political climates where investments are made.


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