Fun way to end the week: the entry page for SmartCEO’s New York CPA & ESQ awards is emblazoned with a quote from McManus & Associates Founding Principal John O. McManus.
Trusts & Estates/WealthManagement.com this week published an article from McManus & Associates Founding Principal and top AV-rated Attorney John O. McManus. The piece, “Top 10 Considerations for Estate Planning with Life Insurance,” was also be blasted out in the publication’s e-newsletter on October 30th.
The contribution shares the following 10 questions for advisors to discuss with clients:
- If a life insurance policy is owned by a trust, what’s the ongoing maintenance required for the strategy to succeed most effectively?
- What are Cristofani beneficiaries and how can they make a life insurance trust even more gift tax efficient?
- How can insurance be used to facilitate a business succession plan?
- Term, whole life, 2nd to die–from a layman’s standpoint, what are the unique benefits of each?
- How can ownership and beneficiary designations for a life insurance policy affect the taxable assets of the estate?
- How do non-citizens avoid qualified domestic trust (QDOT) requirements with a life insurance trust?
- What are some strategies to avoid the three-year look-back period when existing insurance is transferred to a trust?
- Annual exemption gifts can fund a life insurance trust gift tax-free, but what about generation-skipping transfer (GST) tax issues? How is the trust affected?
- When the terms of an irrevocable trust don’t reflect the wishes of the parties, what options are available?
- How can life insurance be used as a wealth replacement strategy with charitable giving?
To find out what advice John had for each of the above, check out his full article here.
The Trust Advisor, dubbed as “America’s Leading Wealth Management e-Newsletter,” today published an article based on McManus & Associates’ latest client conference call in our educational series. The piece, titled “The Trusts Are Signed, Now It’s Time To Keep Them Running,” opens by pointing out that the fiscal cliff pushed billions of dollars into irrevocable trusts.
Author of the story Scott Martin observes that “most of the assets have already flown, leaving many advisors who rode the trust wave to ask what’s next.” Martin goes on to cite advice from top-AV rated Attorney and Founding Principal of McManus & Associates John O. McManus:
This is actually a big opportunity for those who can switch gears from helping people create trusts to the heavy lifting of keeping those vehicles properly, says top attorney John O. McManus.
He still preaches the importance of those families who have not yet transferred their estates into an irrevocable trust – as he notes, the assets should continue to appreciate – but those who already have are often at a loss.
“I always explain to my clients that the creation of a trust shouldn’t be viewed as a box to check,” he says. “Rather than setting up the trust and moving on, new planning ideas can be continually implemented that utilize the trust as a leading instrument to accomplish one’s financial mission.”
Check out the full write-up to see McManus’ checklist for managing an existing irrevocable trust.
Penned by John O. McManus, founding principal of McManus & Associates, the article “The Road Ahead for Estate Planning” is today featured by LifeHealthPro. LifeHealthPro is a go-to resource for advisors, insurance wholesalers, CPAs and estate planning attorneys.
In the piece, John discusses the several surprising outcomes regarding estate planning that emerged as part of the fiscal cliff deal and outlines the new tax rates and exemption amounts. He also recommends several “tactics to try.” From the article:
Here are a few of the trust and non-trust estate planning strategies that married and single persons should explore in 2013:
- Foundations: With increased taxes, gifts to charity have a greater tax-deductible value. Gifts to foundations allow full deduction in the year of the gift, whereas transfers out of foundation can be as small as 5 percent on an annual basis, allowing assets in the foundation to continue to grow.
- Charitable trust: These enable one to make gifts to charity and receive immediate deductions. One can continue to receive income from the charitable gift for a period of time. Gifts can also be made where the charity gets a distribution each year and the loved ones receive the remainder.
- Family mission planning: The family mission and preparing heirs for inheritances are critical to ensuring a successful transfer of wealth and family values, to helping minimize conflict and maximize harmony and to supporting charitable endeavors.
- Life insurance trusts: Funding a trust with a life insurance policy is a smart way to get a windfall of cash when someone passes away to pay off estate taxes. It’s also an avenue for getting a big asset off of one’s balance sheet, keeping a large amount of cash safe and protected. Make sure the trust is named as the beneficiary and policy owner (e.g., John Doe Irrevocable Trust). If a house is put into a trust and the house is insured, make sure to get the insurance policy changed to reflect the ownership by the trust. The trust should be the primary insured on the policy, and the individual can be the secondary.
And cautioning readers to be mindful of what’s ahead that could impact estate planning, he shares this observation:
Several valuable opportunities emerged as part of the fiscal cliff negotiations that pleasantly surprised the estate planning community. We are not completely out of the woods, however, with the debt ceiling debates just around the corner. When it comes to safeguarding wealth and family values, it’s important now to look ahead without losing sight of what’s in the rearview mirror.
Read the whole thing at http://www.lifehealthpro.com/2013/02/22/the-road-ahead-for-estate-planning. Also keep an eye out for John’s piece in Monday’s Life Insurance Insider e-newsletter. Next week will be a special estate planning edition.