WEALTH REPLACEMENT TRUSTS

Another Role for Life Insurance -
The Wealth Replacement Trust

The Problem:

There can be significant tax advantages in giving appreciated assets to a charity. Examples include real estate and securities. If you were to sell an appreciated asset, the gain would be subject to capital gains tax. By donating the appreciated asset to a charity, however, you can receive an income tax deduction equal to the fair market value of the asset and pay no capital gains tax on the increased value.

For example, Donor A purchased $25,000 of publicly-traded stock several years ago. That stock is now worth $100,000. If she sells the stock, Donor A must pay capital gains tax on the $75,000 gain. Alternatively, Donor A can donate the stock to a qualified charity and, in turn, receive a $100,000 charitable income tax deduction. When the charity then sells the stock, no capital gains tax is due on the appreciation.

When a donor makes substantial gifts to charity, however, the donor's family is deprived of those assets that they might otherwise have received.

A Potential Life Insurance Solution:

In order to replace the value of the assets transferred to a charity, the donor establishes a second trust - an irrevocable life insurance trust - and the trustee acquires life insurance on the donor's life in an amount equal to the value of the charitable gift. Using the charitable deduction income tax savings and any annual cash flow from a charitable trust or charitable gift annuity, the donor makes gifts to the irrevocable life insurance trust that are then used to pay the life insurance policy premiums. At the donor's death, the life insurance proceeds generally pass to the donor's heirs free of income tax and estate tax, replacing the value of the assets that were given to the charity.

Please contact my office if you would like more information on wealth replacement trusts.

MESSAGES
from the Masters.

LIVING AND OPERATING WITH INTEGRITY

by Paul J. Meyer

Integrity is where it all begins!

Integrity is real and concrete!

Integrity is measurable and includes traits like being honest, keeping your word, standing your ground for what is right, and maintaining your honor.

It is something you can't pretend to have.

Real integrity is treating others the way you want to be treated even when nobody is watching - the Golden Rule.

If your foundation is one of integrity, your choices and decisions will bear that out. On the other hand, if you lack integrity, that too will become evident.

Your upright actions will show in every instance that: "I do the right thing simply because it is the right thing to do."

In the book of Proverbs, it says: The integrity of the upright guides them. Also, A person of integrity works securely, but he who walks a crooked path will be found out.

Here are some benefits I have found from keeping integrity:

* Increased sales and profits
* Inspiration and motivation
* Unexpected favor
* Respect and appreciation
* A good name and reputation
* Peace and contentment
* God's blessings in every part of my life

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About our firm:

Offering Financial & Estate Planning, Investments, Insurance, Accounting, Payroll, and Income Tax Preparation for Individuals & Small Business. "Financial Strategies That Fit YOUR Needs!"

QUOTES
from the Masters.

On Thinking Big

"If you want to have a WOW life, write yourself a WOW business plan."

-– Mark Victor Hansen

"Never measure the height of a mountain until you have reached the top. Then you will see how low it was."

-– Dag Hammarskjold

"Looking to the stars always makes me dream, as simply as I dream over the black dots representing towns and villages on a map. Why, I ask myself, shouldn't the shining dots of the sky be as accessible as the black dots on the map of France?"

-- Vincent Van Gogh

"Every great advance in science has issued from a new audacity of imagination."

-- John Dewey

On Perseverance/ Persistence

"When you get into a tight place, and everything goes against you, till it seems as though you could not hold on a moment longer, never give up then--for that is just the place and time that the tide will turn."

-- Harriet Beecher Stowe

"Big shots are only little shots who keep shooting."

-– Christopher Morley

"If what you are doing is worth doing, hang in there until it is done."

-– Nido Qubein

"Winning is easy - all you have to do is outlast your opponent."

-– Doug Firebaugh