Re: persfin-digest V5 #24

From: "Cal Lester" <cal_lester@email.msn.com>
Subject: Re: persfin-digest V5 #24
Date: Thu, 18 Jun 1998 23:23:27 -0400

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>persfin-digest         Thursday, June 18 1998         Volume 05 : Number
024
>

>From: "Paul Wojcik" <paul_wojcik@hotmail.com>
>Subject: Life Insurance / Trusts / Estate planning
>
>Since Mr. Lester invited Life Insurance questions, I figured I would
>pose a question or two that I've been thinking about.
>I want to have term coverage on myself with my wife as benficiary,
>followed by my son if my wife doesn't survive me.
>
>In order to avoid excessive estate taxes in the event that my wife and I
>both die and my son is to collect the insurance, is it advisable to
>establish an irrevocable trust and have the trust by the policy and be
>the benficiary?

>>>>    The establishment of an Irrevocable Life Insurance Trust, more than
three years prior to you death, could provide Federal EstateTax Free
Dollars. There are however many other factors to take into consideration.
1) Your age, your wifes age, your sons age.
2) do you have now, or expect in the near future to have a Federal Estate
Taxable Estate? Remember you can currently shelter 1.4 Mill, going to 2 Mill
in a few years.
3) YES, if you do establish the Trust, you should contribute an amount (NOT
the same as the premium) to the Trust, and have the Trust be the Applicant,
Premium Payor & Beneficiary of the policy.
4) you could purchase a " Last to Die " policy, reduce cost, and attain your
primary goal.

This seems to be the best structure, but what happens
>if we plan this way and then only I die?  I could have her as a primary
>benficiary, but I wouldn't want the policy payoff to be a large gift
>from the trust to her...

>>>> If you purchase "First to Die" policies, and you die first, the
proceeds are paid to the TRUST, which has instructions that you gave it, as
to how much of the proceeds to dispurs, to whom and when.

Should she and my son both be trust  benficiaries?

>>>>    NO. The TRUST MUST be the beneficiary at ALL times............

Can she also be the trustee?


>>>>    Yes she could, but it would DEFEAT the purpose that you suggested.
If you want it OUT of your Federal Estate Taxable Estate, then she can NOT
be a Trustee.


>Many thanks for help on these confusing (at least for me) topics,
>Paul


>>>> My pleasure. I hope that I have shed some light on your questions. I
strongly urge you to consult with your Financial Advisors, to determine if
there is even a need for concern about F/E/Taxes.
BTW, IF there is, then in all probability you should NOT entertain the use
of Term Insurance........................
If you have any further questions, I will be happy to try to answer tehm.
Cal Lester CLU
Insurance Course Coordinator
Broward Community College.
Cal_Lester@msn.com


 >From: "Brian O'Rourke" <borourke@strategies-u.com>
>Subject: Disability Insurance Questions

>I have a question about disability insurance. My former employer
>provided disability insurance, but my current employer does not, so I
>will be delving into the disability insurance market on my own for the
>first time.  Who are the major disability insurance providers for
>individuals? What premiums can a 33-year old male expect to pay to
>replace around 60 - 70% of income?
>
>Brian O'Rourke
>
>>>>    Brian, I am certain that you will not appreciate my responce to this
question. As a general rule, I do NOT reccomend Insurance Carriers in this
venue. I try at all times to keep my comments as generic as possible.
            I would suggest that you first contact the Insurance
Commissioner in your State. Second go to the Library, and research the
companies that they tell you sell D/I in your State. Third  check with
friends and neighbors to see they are using, AND how well they have paid
claims in the past.
            Please keep in mind, that price is NOT the major factor in
deciding which policy to purchase. Look for company stability, claims paying
& service.
Cal Lester CLU
Insurance Course Coordinator
Broward Community College
Cal_Lester@msn.com








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