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Published byMelanie Hampton Modified over 9 years ago
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FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC All the information contained herein is confidential and proprietary and belongs solely to American General Life Companies. The unauthorized use, reproduction or disclosure of this information is prohibited. CMG 2014 Success Conference August 13 – 15, 2014 Las Vegas, NV Asset Protector Breakout Session
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1 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC AG Secure Lifetime GUL II ® With Asset Protector What is Accomplished? Protection from dying too soon Protection from living too long Protection from chronic illness
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2 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC AG Secure Lifetime GUL II ® What is NOT Accomplished? Protection from IRS Protection from Client’s creditors Protection from future Ex-Spouses Protection from Beneficiary’s Creditors Protection from Beneficiaries themselves
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3 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Purchase the policy inside an irrevocable trust (“ILIT”) Is there a way to provide protection from these additional risks?
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4 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Death benefit removed from estate Not available for judgment creditors (grantor’s and children’s) Not available for divorcing spouses (client’s subsequent spouse and children’s spouses) Distributions based on grantor’s wishes (protect children from themselves) ILIT Owned Policy
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5 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC If policy is owned by ILIT – how can Client access funds? * Accelerated Access Solution & Lifestyle Income Solution are paid to the policy owner * The ILIT is the owner * How does the money get to the client without losing the protections we seek?
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6 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Two methods for getting money to client without losing protections: Spousal Lifetime Access Trust (SLAT) Loans to Client
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7 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 1.The “Grantor” spouse establishes an irrevocable life insurance trust (“ILIT”) 2.The Grantor spouse gifts separate property to the ILIT to make the necessary premium payments on the life insurance policy – the Grantor can also gift other separate property to the ILIT (especially income producing property) Spousal Lifetime Access Trust
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8 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 3.The ILIT trustee purchases a life insurance policy on the Grantor or on the Grantor and his/her spouse – the ILIT is owner and beneficiary of the policy 4.The trustee has the ability to access the policy’s cash values – and any other assets of the ILIT Spousal Lifetime Access Trust
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9 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 5.The trustee may make distributions of ILIT property to the Grantor’s spouse during his/her lifetime according to the trust document 6.The ILIT will receive the policy’s income- tax-free proceeds at the death of the insured(s) Spousal Lifetime Access Trust
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10 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 7.The ILIT funds can then be used for estate liquidity by lending money to the estate or by purchasing assets from the estate 8.The ILIT beneficiaries will receive distributions from the ILIT according to the trust document. Spousal Lifetime Access Trust
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11 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC 1.Trustee authorized to make arms-length loans to Grantor 2.Grantor should pledge sufficient collateral 3.Interest should be at market rate 4.Interest can be paid or accrued 5.Interest should not be taxable if “grantor trust” Loans to Grantor
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12 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Putting a Protection Asset Into a Protection Entity Provides Maximum Protection SLAT provisions and Loan Ability provide Flexibility to access the funds SLAT & Loans Summary
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13 FOR PRODUCER USE ONLY – NOT FOR DISSEMINATION TO THE PUBLIC Thank You
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