Sapers & Wallack
Case Studies
Estate Planning Case Study #1
Client:
A male prospect age 72 had life insurance policies that had $2 million in insurance that would lapse at age 95.
Issues:
The prospect was concerned that he would outlive his policy. He came to Sapers & Wallack with high premiums on these policies and no guarantee death benefit to his family.
The Solution:
Sapers & Wallack initiated a tax-free exchange on his existing policies into guaranteed* no lapse policies, which gave him a 10% increase in coverage and the ability to leave more to his heirs.
Highlights of the solution included:
- The yearly premiums on his new policy were $12,000 less than what he was paying for his original policy, giving our client more money to spend while he was living and the ability to still leave an equal sized death benefit to his children.
- The new policy gave the client a 10% increase in coverage, meaning not only would our client be spending less on his annual premiums, but he could also leave increasingly more to his heirs at his death with the increased benefit.
Outcome:
Client has insurance that is guaranteed to cover him for his lifetime, and saves over $12,000/year, while increasing coverage by 10%.
*Guarantees subject to the claims paying ability of the issuing insurance company.
Case Study for illustrative purposes only. Individual results may vary.
Estate Planning Case Study #2
Client:
A charitably inclined female executive, age 40.
Issues:
The client, an investment banker, wanted to reduce her income taxes on her $5 million annual income. She had goals to donate a significant amount of her yearly income to charity, to leave a large gift to her family and to find a tax shelter for her income.
The Solution:
The client was introduced to the concept of a Super Charitable Lead Annuity Trust which invests in tax-free municipal bonds and a variable life insurance policy insuring her life as a means for her to achieve her charitable objectives and provide more wealth for her family. From her yearly earnings, $1 million will go directly into a charitable trust which will payout $60,000 a year in donations over 21 years, equivalent to her claiming $1 million in deductions for one year and allowing her a $1 million dollar tax shelter. In addition, at the end of 21 years, her children will get whatever is left in the trust without any gift or estate taxes being paid.
Highlights of the solutions included:
- The professionals at Sapers & Wallack worked closely with her attorney and accountant to design the plan and to help process the tax filings that are necessary in administering the concept once it is set.
- The Sapers & Wallack team analyzed the investment options and monitored the policies after introducing the concept and continues to hold annual reviews with the client to make modifications as necessary in terms of the beneficiaries, discretion of gifts to charity and family and investment fund options.
Outcome:
The client received a charitable deduction in the first year of $1 million dollars and created an opportunity for her to give $60,000 to charity annually. With the establishment of a donor advised fund, the client has complete control and flexibility over what charities she wants to delegate her yearly contributions. Her family now has a $5 million death benefit, and estate tax savings of over 100%.
Case Study for illustrative purposes only. Individual results may vary.