Creating a Family Legacy with Life Insurance John Bledsoe

Current Law 2006 Exclusion Equivalent is $2,000, Exclusion Equivalent is $2,000, Exclusion Equivalent is $2,000, Exclusion Equivalent is $3,500, Exclusion Equivalent is $Unlimited 2011 and beyond Exclusion Equivalent is $1,000,000 1

Millionaire Next Door Invisible Everywhere They need us 2

Perfect Estate Plan Motivation of Having Wealth Control Access Default Beneficiaries 3

Target Market Advanced Planning Age Net Worth Family Types of Assets 4

Logical Progression Living Trust Plan Double Exclusion for married couples Irrevocable Trust Call it an ILIT at your peril 5

Irrevocable Trust Annual exclusion gifts (currently unused) Explain Crummy Expanded “Crummies” (without dummies) Friendly trustee with broad powers Main trustee ingredient First question they will ask No Brainer to maximize funding every year 6

Asset Allocation of Irrevocable Trust What assets are being transferred Cash is common Life Insurance as the custom built investment Not Protection Compare to bond yield IRR on death 7

Life Insurance Examples Term Permanent Single Life or Survivorship BOCA (not Raton) Guaranteed products It’s a tax play all right…income tax 8

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Benefits of Life Insurance Death benefit Premium notices Income tax treatment Rate of return 10

What happens if estate tax is repealed longer term? 11

Action Steps Identify Prospective Clients Show Prospects the Merits of Annual Transfers Draft Irrevocable "Gifting Trust" Underwrite for Life Insurance if Appropriate Transfer Annual Maximum to New Trust Rinse and Repeat 12