William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Asset’

Life Insurance: Iron-Clad Asset Protection or Chink in the Armor?

Posted by William Byrnes on January 6, 2011

Life insurance is often touted as an iron-clad asset protection vehicle since many states exempt life insurance policies from attachment by an insured’s creditors.  Life insurance can even provide limited asset protection in bankruptcy.

But life insurance is not a foolproof method of protecting family assets from all creditors, as illustrated by a recent U.S. District Court case.  In that case, an insured sued his insurance company and the IRS after the insurance company paid over the cash value of a life insurance policy to the IRS to satisfy a tax levy.  The insured’s wife and daughter were the beneficiaries of the life insurance policy, which would have shielded the policy from creditors in many states, including his.   Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of asset protection in Advisor’s Journal, see Domestic Asset Protection Trusts: New Chart Ranks the States (CC 10-30).

For in-depth analysis of asset protection, see Advisor’s Main Library: G—Domestic Asset Protection Trusts.

We invite your questions and comments by posting them below or by calling the Panel of Experts.


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Offshore Private Placement Variable Universal Life Insurance

Posted by William Byrnes on October 2, 2010

Author: Benjamin S. Terner

Why is this Topic Important to Wealth Managers? Provides an overview of one useful tool for affluent clients.  Presents offshore private placement life insurance considerations wealth managers may consider when discussing this topic with clients.

As a brief review, private placement variable universal life insurance may allow individuals “the ability to select asset management beyond the limited asset-management choices offered in retail variable life insurance products.”

Generally speaking, one benefit derived from the use of private placement policies “in the high-net-worth market” is that the policy is essentially an “investment vehicle, optimally used for the most tax-inefficient asset classes in an investor’s portfolio.”  Therefore, some common goals for wealth managers structuring transactions as private placement life contracts: “are to take advantage of the income tax and possible estate tax savings, to maximize investment choices, and to incur as little cost as possible in doing so.”

Please see the AdvisorFYI blog for the entire blogticle.

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