The problem
We are stuck in a low interest environment. You’re looking for a decent return on your investments, but at the same time you don’t want to be overexposed to any one asset class. Moreover, under President Obama’s recently enacted signature legislation, income tax rates for the highest earners are scheduled to rise to 39.6%, and the gift tax rate will rise to 40% for any gifts above the exclusion level.

So what can you do?
Take advantage of Section 7702 of the Internal Revenue Code to establish a pool of tax-free, guaranteed future assets in exchange for a modest investment today. This strategy allows you to achieve a return of anywhere from 5-20 times your original investment, and enjoy the money completely free from any gift-, income- or estate taxes.

How does it work?
The strategy centers around creating wealth at the parents, in-laws or grandparents generation and transferring that wealth to yourself, your siblings and your children. This is done by writing one or more permanent life policies on family members at the parent or grandparent generation, and naming yourself as the beneficiary. You can also include siblings or your adult children as beneficiaries as well.

Do the math
Parents or grandparents can gift any amount desired to the children or grandchildren and buy a one-pay policy that spins out 5, 10, 15 or even 20 times the gift. For example, assume both parents are 60 years old and they make a $100,000 gift to their children. The adult siblings turn around and use the $100,000 gift to purchase a $1 million life insurance policy on their parents (they can also start with less and have the option of paying as little as $10,000 annually). At completion the children collect $1 million, increasing their original premium payment by 10X, tax-free.

Parents or grandparents don’t have the money?
Not a problem. The children can pool their money and pay the premiums themselves and collect the benefit tax-free. In the example above, the children would have to earn $1,666,666 pretax in the 40% tax bracket, on a $100,000 investment, to net $1 million after tax.

Know anyone achieving those types of returns in this market with their conservative money? We don’t!

Where to find the money
Do you have underperforming real estate? Stocks and mutual funds that have barely budged in years, or are trading at a loss? Money sitting in cash while you wait for an economic recovery that may still be years away? This strategy is nothing more than shifting assets on your balance sheet, resulting in a more balanced portfolio with lower overall risk.

Full liquidity
Concerned about tying up your money, in case a new investment opportunity may come around? Not to worry. Your money is 100% safe, 100% secure and 100% liquid, as long as you work with a reputable insurance carrier that has the highest Comdex rating. We work exclusively with the top-rated carriers.

Ready to get started? Contact us today and we will design an effective strategy tailored to your particular family. This is one of the greatest benefits ever designed to create lasting wealth for any family!

David Cuthbert | | 857.234.0919

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