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R&R Insurance Blog

Start Protecting the Future of Your Business Now

Posted by Pat Driscoll

iStock_82857389_LARGE.jpgMany high net worth business owners are going to be impacted by the Federal Estate Tax – a rate that is higher than the highest Income Tax Rate. It’s a 40% tax on any assets exceeding the Unified Credit level. The IRS has two “Trump Cards” to play that can push you into that tax bracket.

Personal or corporate-owned life insurance can unintentionally bump the values of their estates at the worst possible time – death. The second and potentially even more damaging trigger is pegging the value of their business. They may be operating with the notion that Book Value will be the accepted method used by the IRS. It typically is not. Some combination of Book Value and Capitalization of Earnings is a far more likely method.

Imagine what would happen if your business suddenly had to continue without you, a partner or key employee. The death, disability or retirement of a key executive causes a number of problems which can be addressed with proper planning.

Through R&R, you can make sure that you are covered in case the unexpected happens. Please contact Tom or Pat Driscoll to get more information on R&R's business valuation services and more.  

Topics: estate planning, business valuation

Wisconsin Residents: 3 Ways to Save Money on Life Insurance

Posted by Tom Driscoll

family1If people depend on you financially, (i.e. mortgages, schooling, child or parental care) life insurance is an absolute must, and no one should pay more than they have to.

Over the past few years we have become accustomed to spending less and saving more, due to the economy. Even as the economy rebounds, many people continue to look for ways to keep their household budgets in check. Luckily, spending less doesn’t have to mean doing with less, especially when it comes to life insurance coverage. There are ways you can maintain your coverage, but pay less for it.

Life insurance is a financial safety net for your loved ones, so it’s critical to maintain that coverage especially with the uncertainty that remains in the economy. However, keeping that coverage doesn’t have to be a financial burden.

There are ways to save money on your existing coverage, and I’ve got some tips to help you do just that.

  1. You’re healthier. If you have quit smoking, lost a substantial amount of weight or made significant improvements to your health, let your insurance company know. You may be able to qualify for a lower rate on your coverage.
  2. Rates are near historic lows. Life insurance rates remain near historic lows. In fact, the cost of basic term life insurance has fallen by nearly 50 percent over the past decade. So if your family’s budget is tight and your health status hasn’t changed much since the time you last purchased coverage, you may want to apply for a new policy. If you do, make sure not to drop your current coverage until the new policy is in force.
  3. Circumstances have changed. It is smart to review your policy every year to make sure it’s adequate and up to date. If the kids are out of the house, your mortgage is paid down, you’ve gotten divorced or family members no longer need your financial support, your need for life insurance coverage may have decreased. A smaller face amount policy will likely save you money.

For more information about life insurance, estate planning, business continuation and annuities, contact knowledgebroker Tom Driscoll.

Topics: Life Insurance, Business Continuation, Mortgage Protection, Financial Services, annuities, tom driscoll, estate planning

The Obama Budget and Its Effect on Estate Planning

Posted by Pat Driscoll

house on a puzzleIn the 2014 budget, the President is looking to raise estate tax rates and lower exemptions that applied in 2009. While nothing is finalized yet, Jonathan Forster & Jennifer Smith provide interesting opinions on the potential impacts of the proposed budget: Weighing The Obama Budget's Impact on Estate Planning.

Under the President's proposal, as of 2018 the top estate, gift, and GST tax rates would return to 45% (up from 40%), the estate and GST tax exemptions would revert to $3.5 million, and the gift tax exemption to $1 million (all down from $5.25 million). In their opinion, this would make lifetime gift planning more complicated for wealthy families and closely-held business owners who want to transfer ownership to their family members.

Additionally, this year's budget would only tax property transferred to trusts through sales or similar transactions that are "disregarded" for income tax purposes under the grant trust rules. The potential impact: even in its more restricted form, passage of this proposal would adversely affect planning with grantor trusts.

The Obama administration wants to terminate a trusts' GST-exempt status on its 90th anniversary and subject the trust assets or subsequent distributions to GST tax. Potential impact: this would limit the long-term tax leverage afforded by GST exempt trusts and a family's ability to preserve wealth over time.

The Administration would also limit the availability of the GST exemption to qualified transfers made directly by a living donor and not through trusts. Generally, direct payments to medical care providers or tuition for another person are gift and GST-tax exempt. The potential impact, in their opinion, is that it would affect all non-exempt trusts, not just HEETs.

Now is the time to make the contact Pat Driscoll and take advantage of current estate planning laws.

Topics: Personal Insurance, obama budget, estate plan, estate planning, estate tax strategies