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Hickory, NC January, 2010 “Nothing is more certain than death and taxes” as the old saying goes. However, based upon Congress’ recent inaction on estate tax reform, what is uncertain is the exact amount of the tax. In 2010, there evidently will be no estate tax, unless Congress acts retroactively sometime during 2010. Beginning in 2011, the old estate tax thresholds of $ 1 Million per person may be the new exemption. It is anyone’s guess what this Congress will decide to do on this issue. With all of the uncertainty, many planners and clients are deferring making a decision as it relates to implementing any meaningful estate transfer plan until the rules are clear. “Waiting is a mistake for most clients”, says Bryan Setzler, the creator of AlTERMative Survivor, a new strategy that is very appealing as a “wait and see” strategy. “Clients who are healthy now, should implement a wait and see strategy to protect their ability to have a well-conceived estate transfer plan.” Altermative Survivor is a strategy that dramatically lowers the acquisition cost to survivor life insurance. One lump sum is financed over 14 to 18 years. The client just pays a principle and interest payment to repay the modest loan. The strategy allows significant survivor life insurance to be implemented at a very low outlay. Example: Male/Female 65 $ 2.5 Million of survivor coverage may have an outlay of only $ 8800 per year for 18 years. At any time, but usually at the end of 18 years, the client can assess their estate transfer needs and adjust the policy face amount and premium based upon their needs. If the “old” thresholds of $ 1 Million per person become law by default, an estate of $ 7 Million can “avoid” the $ 2.5 Million of estate shrinkage for only $ 8800 per year! “Most clients will agree that it makes no sense to avoid addressing a potential exposure of $ 2.5 Million, if the solution is so relatively inexpensive”, says Setzler.
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