Intergenerational Wealth Preservation
Clarity, Strategy, Control

G1-G2 Wealth Transfer – Strategy Overview

• Ideal Candidate – Over age 70, with sizable estate.
• Taxes – Upon death – 45% - maximum rate.
• Family – Nets only 55%.
• Key Aspect - Second Generation (G2) is healthy.
• How Strategy Works -
• Parental Generation (G1) advances a single premium for insurance on G2, owned by a Trust.
• Upon death of G1, the “insurance receivable” is valued at as much as a 90% discount, not payable until G2 death
• G2 may retain, settle or surrender policy as desired

G1-G2 Wealth Transfer – Strategy Overview
Example: Mother –Age 75 with $100 million estate.
How Strategy Works:

• Mother advances $10 M to a trust to acquire insurance on son (age 50).
• Mother to receive $10M back at death of son (insurance receivable).
• Mother has an imputed gift each year to trust beneficiaries.
• Mother dies – Insurance Receivable valued at $1M (90% discount).
• Trust pays estate $1M
• Trust owned policy* at Mother’s death in 5 years
• Insurance Amount - $50,000,000.
• Cash Value - $10,738,545.

RESULT:

• Mother’s estate is reduced $9 million per Child
• Estate tax savings $4 million per Child