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Is Your Buy-Sell Jury-Rigged & Jerry-Built?

Back in the days before the development of things like the NiMH or lithium-ion battery, stand-up comedian Don Adams (who later became Maxwell, the original Get Smart secret agent) used to joke that electric cars were unpopular because of the high cost of the extension cord.
 
Many insurance advisors face a similar hurdle when advising clients to properly set up a buy-sell arrangement using term insurance to fund the plan.

The cost of getting with the attorney to draft and implement a written agreement, to say nothing of the time and effort required, is discouragingly disproportionate to the amount of premiums for the coverage.

Consequently, just to get things done the policies are often jointly-owned as a “no-fuss” method of assuring that proceeds will get to the surviving owners to buy out a deceased owner’s estate, without a formal agreement.
 
It works like this:
 
Joint owners and beneficiaries (some states add “with right of survivorship”) share equally in the possession of the policy and the right to proceeds, so long as they survive the insured. If not, only the survivors share equally. So if equal business owners A, B, and C agree to fund a buy-sell then, e.g., A and B jointly own the policy on C. When C dies A and B have funds to buy C’s business interest. But more important, C’s joint interest in the policies on A and B ends. A and B are now the sole owner and beneficiary of the policy on each other for use at the second death.
 
Something is said to be “jury-rigged” when it is simply constructed with the materials at hand. That same thing is “jerry-built” when it is done in a shoddy or inferior fashion. Buy-sell plans built solely on joint policy ownership are both. The only thing assured is that the money gets to the prospective buyers. After that it’s all up for grabs.
 
Consider:
  • The surviving owners are under no legal obligation to buy, leaving the estate of the deceased (probably the surviving spouse) in a lurch.
  • The deceased’s estate is under no obligation to sell, leaving the deceased’s heirs as a new owner in the business.
  • There is no fixed price for the business for estate or for income tax purposes should the IRS get involved.
  • Re-arrangement of interests in the remaining policies could constitute a transfer-for-value.
Of course the worst that could happen is for someone to die with no coverage in force. So if clients are resolute in their refusal to take proper steps to implement a written plan, the advisor should at least get coverage issued with the most advisable ownership arrangement. But in addition the file should contain a cover-your-backside letter from the advisor to the clients spelling out the need to discuss the possible problems with their tax and legal advisor.
 
Call for help in drafting the letter and, just maybe, we might even talk the clients into going to their attorney and doing it right. Try 706-614-3796 or tom@cpsadvancedmarkets.com.
 
Join, jury, jerry – there are a lot of J’s flying around this article. And it just so happens that James and John are the first and second most common male names in the United States. And sure enough there have been six presidents named James and five named John.
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A Buy-Sell: Cheap To Fund, But Expensive To Form?

Nothing saps the thrill of owning a sassy new automobile more than the increased premiums on the car insurance that are about half the amount of the monthly payment on your Little Deuce Coupe.
 
And those nifty printer/scanner/copier/faxing machines that they are practically giving away at Paper-clips ‘R’ Us don’t seem so nifty when you replace the ink cartridge(s) for the first time at a cost about equal to the original purchase price.

The phenomenon of deferred-sticker-shock can put the bite on what might otherwise be a nice insurance sale to fund a buy-sell agreement.

As an example:
 
Three young, non-smoking, healthy entrepreneurs, let’s call them Sharon, Caroline and Andrea, operate a promising LLC taxed as an S-Corp. They agree to buy out the estate of any that might prematurely pass for $1,000,000. They take out a policy on each for that amount to fund the buy-out. On each policy the two non-insureds jointly own the policy on the insured, e.g. Sharon and Caroline own the policy on Andrea.
 
So Andrea dies and the $1,000,000 from her policy is used to buy her interest from her estate. That’s all good as far as it goes. But what happens to Andrea’s interest in the two remaining policies? Well, because they were owned jointly, Sharon is now the sole owner of the policy on Caroline and vice versa. The problem is that the shift in ownership caused by Andrea’s death is probably a transfer-for-value. Up to one-half the death benefit could be subject to income tax if paid.
 
The most common exception to the TFV rule is an ownership change between partners. The problem here is that the ladies’ company is taxed as an S-Corp and there may be reasons they don’t want to change to partnership taxation. And the cost of creating a partnership simply to handle the insurance may be several times the annual premium on the insurance, all to avoid a tax hit that will only occur if a second death occurs while they are still operating the business.
 
Perhaps the best you can do is to suggest they discuss with their tax advisor the feasibility of an ownership reset if a first death occurs.
 
This would involve:
 
  1. Transferring the remaining policies back to the insured (another TFV exception that also cleanses the policy of the taint of the TFV).
  2. The creation of a partnership between the survivors (at least the cost is incurred only when needed).
  3. Exchanging the policies to establish cross-ownership without any TFV issues.
The suggestion should be reduced to a writing that they can take to their tax advisor and that you can also keep in your file to document that you raised the issue. We can help with that and also explain the problem to the client and their advisor.
 
Give Tom Virkler, JD, CPS Director of Advanced Markets, a call at 706-614-3796 or email tom@cpsadvancedmarkets.com regarding this and any planning questions that come up, especially in your clients’ buy-sell planning.
 
Long ago in the pre-Tesla days of electric car design, a cartoon in the Saturday Evening Post (whatever that is) showed a salesman breaking down the cost of an electrical car to a prospective buyer: “. . . and that will be $1500 for the automobile, and $35,000 for the extension cord.”
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Use the Exemption, But Don’t Lose the Store

I didn’t mean to burst a friend’s bubble when he proudly told me he had been asked to usher at a wedding but wouldn’t take part with the bridal party on the podium during the ceremony.  I suggested his role was equivalent to trying out for the neighborhood softball team and being assigned the role of scorekeeper.  I suppose I should have let him down with a bit more ease.

Kinder terms might have included sinecure, or minister-without-portfolio that describe a cushy job that has pay but requires little responsibility and has no authority.  We tend to look down on such positions as they are usually doled out as political or social favors simply because the recipient is owed a favor or knows someone in the back.

All that being said, a more important concern are your high-net-worth clients who would seriously consider giving away large amounts of property under the current high gift and estate tax lifetime exemptions, but don’t want to lose control over the assets.  It might be helpful to quickly review the ins-and-outs of the current exemptions at Time, Tide, and TAXES Wait for No One and High-Lifetime-Exemption Gifting – Playing It Safe! 

Two useful planning concepts that may put concern over loss-of-control to rest and result in significant tax savings are the Family Limited Liability Company (FLLC) and the lowly regarded sinecure!

A limited Liability company is simply a separate tax entity usually established to function as an active ongoing business.  It can be taxed as a C-Corp, an S-Corp, or a partnership.  A Family Limited Liability Company is a plain-ole LLC except all the owners (members) are related.  The FLLC can be used by a taxpayer to bundle assets under one roof where they are maintained and managed, even if not for traditional business purposes.

Consider how an FLLC can take advantage of the high exemption (assume $12,000,000 and a taxpayer with children) and still keep control without the gift being included in the taxable estate (all with the assistance and approval of legal and tax advisors, of course):
  1. The taxpayer chooses the $12,000,000 in assets to gift, creates an LLC, then contributes the assets to the LLC.
  2. The LLC is formed with two classes of ownership interest – assume 1% of the interest has voting rights, and the other 99% is non-voting interest.
  3. The taxpayer can now gift the 99% non-voting interest to heirs, usually to an irrevocable grantor trust for their benefit, without giving up any control or responsibility (sounds like a sinecure to me!).
  4. Even though the book value of the gift is $11,880,000 (99% of $12,000,000) the transfer is protected from tax by the exemption, but even better, the taxpayer still runs the show by retaining all the voting membership. The allocation between the membership classes does not have to be 1%-99%, rather whatever best suits the planning situation.
  5. Even better, advisors may suggest the book value can be reasonably discounted for gift tax purposes because of lack of control over and marketability of the FLLC interest. If so, even a 25% discount would allow for the transfer of non-voting membership with a book value of up to $16,000,000 that would still be protected by a $12,000,000 exemption.

It all reminds me of the time I auditioned for the church choir and ended up being made the music librarian.  Didn’t make the baritone section, but the vote was darn close!  Contact me about these or any planning issues with your CPS casework at 706-614-3796 or tom@cpsadvancedmarkets.com!

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Stacking Estate Planning Concepts – Saving Heirs a Lot More!

By now all high-net-worth clients should be aware that their biggest death-tax savings opportunity – the lifetime exemption – is going to be cut in half on January 1, 2026.  But taking advantage of the high exemption by gifting property now is only the beginning of how much death taxes can be reduced.

A good rule of thumb:  your clients who will benefit are single taxpayers worth over $10,000,000 and married taxpayers worth more than $20,000,000.

Consider these very brief descriptions of accepted planning concepts that address the common questions HNW clients will ask, and that can be layered on top of the current use of the high exemptions.  They can result in a much smaller tax bill as well as allowing for ongoing property management and use even after gifting takes place.

How much can I save using the full exemption now?

A single taxpayer who uses the full higher exemption by gifting from an estate growing at 5%, might reduce the tax due in 20 years by over $6,000,000.  A married couple using both could save over $12,000,000.

What if my spouse and I don’t want to give away both exemption amounts?

Then use at least one full Again, assuming 5% growth, this could save over $6,000,000 in 20 years.

What if Congress decides not to reduce the exemption amount?

Transfer of assets can be treated as a Family Loan (usually to an irrevocable trust). If the exemptions are not reduced the loan can be called, and the property returned.  If exemptions are lowered then the loan can be forgiven just prior to 1/1/2026 and the property kept in the trust, treated as a gift.

What if I don’t want to lose control of the gifted assets?

Assets to be transferred can be organized under a Family Limited Liability Company (FLLC) with a small-percentage voting interest and a large non-voting interest. The non-voting interest, representing the bulk of the FLLC value, can be transferred while the taxpayer retains all voting interest.

Can a gifting spouse continue to benefit from the assets transferred?

Yes, property can be transferred to a Spousal Lifetime Access Trust (SLAT), an irrevocable trust in which the other spouse is a beneficiary for life. The beneficiary spouse can receive the income from the trust each year, as well as distributions for his or her health, education, maintenance, and support.  This gives the gifting spouse vicarious access (through the beneficiary spouse) to the transferred assets, if needed.  When the beneficiary spouse dies, nothing in the trust is included in his or her estate.

Can spouses set up two SLATs so that each can use their full exemption for the benefit of the other?

Yes, but special attention must be given to the drafting of the trusts by the legal and tax advisors involved, because certain restrictions apply, so as not to run afoul with the IRS.

If you think implementation of any or all of these concepts might help one of your HNW clients, I am available to talk more fully with you, and your client, and their advisors.  Let me know at 706-614-3796 or tom@cpsadvancedmarkets.com.

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High-Lifetime-Exemption Gifting – Playing It Safe!

Having already been pestered to don her heavy winter overcoat in the middle of the night, the lady turned to the steward and scowled, “Why should I get into your little boat and leave this great big ship?”  As bands blared and bulbs blazed behind her on the 900-foot steel deck of the great liner Titanic, stepping into a swinging dingy as it dangled 70 feet above the black ocean surface did not seem the better choice.

Meanwhile Thomas Andrews, the designer of the colossal craft who knew her every bolt and ballroom, was receiving reports of leaks in the first five of the ship’s 12 compartments.  He knew this was enough to create a domino effect that would eventually fill the hull and ultimately spell the Titanic’s demise.

High-net-worth clients are faced with a quandary somewhat akin to that of the lady-on-the-liner. 

Should they put in motion a significant shift of assets out of their estate to take advantage of the temporary opportunity under the estate and gift tax law (for a quick review of the ins-and-outs of the current high lifetime exemptions – read the riveting article “Time, Tide, and TAXES Wait for No One”!).

Use of the generous lifetime exemptions must occur by December 31, 2025, before they drop by 50% under prescribed sunset provisions.  But transfers out of the taxable estate probably means giving up the control of and the benefits from those assets.  Add to this separation anxiety what we are hearing from insurance advisors: that some legal and tax advisors are suggesting delay as there might be a repeal of the sunset of the high exemption amount.

Fortunately, there may be a sensible planning-safe-harbor!  Consider:

A Sale of Assets to Intended Heirs (and the steps usually suggested, and to be affirmed, by legal counsel)

  •  Consider the assets to sell – Choose as if actual gifting was being done.
  • Determine the purchaser – This is usually an irrevocable third-party grantor trust for the benefit of intended heirs (which will be assumed). An existing trust may suffice, otherwise one must be established.
  • Purchase price – A reasonable and supportable fair-market-value of the assets chosen.
  • Payment – Evidenced by a standard commercial promissory note from the trustee requiring regular payment of a reasonable rate of interest.
  • Seed money – Most advisors suggest an existing trust corpus equal to a reasonable percentage of the amount of the note.
The Lifeboat or Not, Both Options Remain Open
  • If the sunset will occur as planned – As 12/31/2025 draws near, a timely forgiveness of the note will be treated as a gift of the property made during the high exemption period.
  • If the high exemptions are extended – The taxpayer can call the note, the trustee can repay in-kind by returning the property to the taxpayer who is then free to think about large gifts at a later time.

The sunset provision is not the last iceberg that will threaten your high-net-worth clients.  A young passenger named Violet Jessup survived the sinking of the Titanic, only to be on board the HMS Britannic in the Aegean Sea two years later when an explosion took the vessel down, but only after Ms. Jessup was safely adrift nearby.  We are ready to help you maneuver the serial obstacles as successfully as she.  Contact us about your planning issues at 706-614-3796 or tom@cpsadvancedmarkets.com!

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Time, Tide, and TAXES Wait for No One

Growing up I lived down the road from a farmer who liked to say, “I lost money yesterday.  The price of hogs went up and I didn’t own any!”

It’s one thing to have regrets over a failure to act when an outcome was unknown at the time.  It’s quite another, and inexcusable, to suffer loss from predictable consequences.

Case in point: the Tax Cuts and Jobs Act of 2017 (TCJA) told all high-net-worth taxpayers they had eight years during which they could double their estate and gift tax savings using an increased lifetime exemption before a “sunset” measure in the bill would reduce it by 50% on January 1, 2026. 

Well, the time to act draws nigh and there are some recurring questions.  The current exemption is $12,920,000 per taxpayer and it increases each year for inflation.  But for simplicity’s sake, assume the current exemption is $12,000,000 which will drop to $6,000,000 on 1/1/2026.

Does the taxpayer have to die to benefit from the exemption?

No.  The exemption protects property from the Federal Estate and Gift Tax, which means that the transfer tax does not apply to the first $12,000,000 given away, whether at death or during life.

How much of the exemption must a taxpayer use before 1/1/2026 to really benefit?

Using the assumed numbers, at least $6,000,000 must be gifted to take advantage of the high exemption.  If $12,000,000 is transferred now, there is no “claw-back,” or retroactive tax due when the exemption is lowered to $6,000,000.  But if only $6,000,000 is gifted now and the exemption is lowered to $6,000,000 on 1/1/2026, the taxpayer will be deemed to have used their full exemption and lost the benefit of the temporary excess.

How significant are the possible tax savings from current use of the high exemption?

If a taxpayer takes advantage of the full exemption and moves the additional $6,000,000 from their estate (i.e., $12,000,000 total in gifts prior to 1/1/2026) and assumes there would have been 5% appreciation on the property if left in the estate, the tax savings in 20 years (under current law) for the reduced estate will be more than $6,000,000.  Savings will double for married couples who currently use both high exemptions.

What if a “lower-end high-net-worth” married couple can’t practically gift both exemption amounts?

Then be sure to fully use one spouse’s exemption so that the current excess amount is taken advantage of now and not lost later (see Question #2, above).

What are the best assets to give away now?

The biggest tax advantage when receiving inherited property is that the recipient receives a “stepped-up basis” in the inherited asset equal to its fair-market-value at the time – in most cases – of decedent’s passing (e.g., the decedent purchased stock for $10 that was worth $100 when bequeathed to the heir; the heir’s basis in the stock is $100). 

But when property is gifted, the donor’s income tax basis is transferred to the recipient (e.g., in the case of the stock worth $100, the donee would have a $10 basis, the same as the donor).  So, the best assets to give – at least regarding eventual income tax consequences – are those whose fair-market-value is closest to the donor’s basis.  Notwithstanding, the eventual estate tax savings could still outweigh results from the transferred basis issue when gifting appreciated property.

What is a good general demographic of those who can benefit from use of the current high exemptions?

Since the eventual taxable estate will approximate a taxpayer’s net worth, single persons with a net worth of at least $6,500,000 and married couples with a joint net worth of at least $13,000,000, should consider the advantages of using the current high exemptions?

My farmer-friend never did buy any hogs, so that story ends there.  But if you have questions or casework on your clients’ planning matters, I’m always ready to with you, and your client, and their advisors, let me know at 706-614-3796 or tom@cpsadvancedmarkets.com.

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Insuring A Domestic Key Person: Who’s Running The Show?

Devotees of the popular PBS series Downton Abbey felt the pangs of separation anxiety as they approached the final episode. This generation’s version of Upstairs, Downstairs has done much in the process of its narrative to enlighten viewers with an inside look at the workings of a great English manor home and the hierarchy among the 40-50 servants required to keep the show on the road.

Quickly evident is the fact that if all goes as it should in the house it’s because the butler did it.

He was the highest ranking among the help. From his command center located in his pantry and “. . . in his gentleman’s black suit he radiated calm and confidence upwards and absolute authority downwards.”

Most were unmarried so they could devote full and full-time attention to the management of all the people and the maintenance of all the property that lay within. So serious were some regarding the security of their employer’s valuables that they slept in beds that blocked the doorway to the locked cabinet holding the family silver, glass and plate. So complete and comprehensive was the coordination of affairs by a competent butler that the master concerned himself with little except where to find and sit at the table come dinnertime.

In 1890 the average annual salary for a butler, in addition to room, board, clothing and gratuities he often received from vendors grateful for the household’s business, was around $8000 in today’s dollars.

The butler has a couple things in common with the contemporary homemaker/stay-at-home parent.

The importance of both is usually unrecognized and neither is paid very much. Consequently there is a viable market among those who make a full-time profession of creating and maintaining an environment in which to raise children.

Because ‘homemaker’ is not a paid position little thought is given to replacement value and the cost of “hiring out” all the responsibilities should a “non-working” spouse pass away.

It’s usually an easy sale because economical term insurance provides the needed protection with guaranteed premiums until the children reach maturity.

Determining an amount is a two-step process.

The bread-winner in the home should have adequate coverage. Then let us find the best carrier who will allow an equal amount on the homemaker.

Carrier choice can also save bumps in the road if the facts in the case are outside the norm

Example: In a recent case the bad daughter dropped off the grid leaving her two children with her retired Mom who took responsibility for her grandchildren. The household was supported by the working good daughter, who was single and adequately insured. Rather than allow insurance on Mom equal to the good daughter’s coverage the carrier proposed only a multiple of Mom’s Social Security income.

Their offer was for less than $50,000, proving again that there is more to a term sale than a spreadsheet!

Suggesting to a household that it members should consider coverage on its domestic key person addresses a vital need and can also be a springboard to many other sales and marketing opportunities.

Contact me for assistance and suggestions at 706-614-3796 or tom@cpsadvancedmarkets.com.

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Uncovering Sales Opportunities And Limiting Liability Exposures Through Trust Owned Policy Reviews

While many advisors implement conservative, guaranteed solutions in trust owned policy arrangements, this is not a universal practice.
 
In a low interest rate environment, many policies that are held in trust may be under-performing and do not have the underlying guarantees to ensure that the policy does not lapse prematurely and that the primary objectives for the insurance planning are obtained.
 
Consider This Scenario
 
In a recent conversation with a carrier representative, they shared an instance in which the trust beneficiaries brought a law suit upon the writing agent, the broker general agent and also the carrier for failing to implement a sound insurance strategy and perform periodic reviews to avoid a premature lapse.
 
Fortunately, there had been a policy review conducted within the last 36 months in which the under-performance was identified and an alternative solution was recommended.
 
The insured (parents of the trust beneficiaries) elected not to pursue this recommendation and failed to inform their children that the review had taken place. The courts held that this effort was enough to avoid adverse litigation and the case was dismissed.
 
Penetrate A New Market
 
This story can be a great conversation starter with any CPA’s, Estate Planning Attorney’s or Trust Companies. You may even know a friend or family member who is serving as a trustee who could be exposed to this potential liability.
 
By offering a complimentary policy review of any trust held policies, you can strengthen your relationships with these professionals – which can lead to future referral opportunities.
 
There may even be a more cost effective policy solution available even if the current plan is not under-performing.
 
We can help streamline the policy review process and for more complex trust planning designs; we can leverage our Director of Advanced Markets, Tom Virkler.
 
Given that most policies held in trust are larger face amounts on older individuals, doing one of these reviews each month could result in a sizable increase in your income.
 
For assistance with a policy review, please contact your Life Sales Rep.
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Making Heads Or Tails Of Executive Benefits Copy

A simple coin toss is the most popular form of settling disputes or making decisions. Subterfuge is often used to improve a participant’s odds. If the caller sees through the “heads-I-win/tails-you-lose” ploy then the flipper can introduce a GMO known as a two-headed coin, usually a Washington quarter, available for a few bucks at any novelty store.
 
All this to illustrate that, for all the similarity of circumstances that the obverse and the reverse have on the dime, they can dictate significantly diverse patterns of events. We use the phrase two sides of the same coin to describe the different, but closely related features, of an idea or course of action. And so it is with certain non-qualified executive benefits.

All employers want economical ways to keep their key people. You make your coin by helping them decide which side of the opportunities available best meet their needs and goals.

An Executive Bonus plan (EB) is the most common selective benefit format in the business marketplace, and a Death-Benefit-Only Plan (DBO) is the most overlooked. Both have as their primary purpose to keep a key person with the company by providing life insurance protection.
 
Their primary difference is the amount of control the employer has – should the executive choose to leave. Both are easy to explain, implement and administer.
 
With an EB plan, simply put, the employer pays for the executive’s personal insurance coverage. In a DBO plan the employer promises to pay a benefit to a named beneficiary if the executive dies while employed, then buys a company-owned policy to fund against the contingency. In either case the vehicle can be a permanent or term product.
 
Often with a DBO the employer chooses to roll the policy out to the executive at the time of retirement. Even with term coverage the conversion privileges can make the transfer attractive if the executive has had health issues.
 
Consider the different sides of this coin:
 
 
Call to talk about executive benefits in particular and business planning issues in general that you should be discussing with every business client and prospect you have.
 
For what it’s worth – the simplest of all Super Bowl wagers made by bettors is on the outcome of the opening coin toss. Those who prefer the NFC did well around and after the turn of the century. The senior conference won the toss from 1999-2012 defying the odds (going in) of 16,384:1.
 
Tom Virkler, JD, Director of Advanced Markets
706-614-3796
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Taxable Estates: The Do’s And Don’ts Of Designations On Life Policies

Why is it that the most important item on an insurance application is allocated so little space? Why is it that the second most important item gets equally parsimonious treatment?

All that other stuff is necessary from either a practical or a legal standpoint, but when the dust of policy issue and underwriting have settled and the contract is in force, all that really matters going forward is who owns the policy while the insured is alive and who will get the dough when he or she dies.

Now, having so simply acknowledged this truth – look at the room given on most applications to set down in writing the intentions of the applicant.

The dangerous psychology of the inadequately small boxes is that they seem to suggest that if more room is needed then a client, or an agent or advisor making recommendations, must be excessive at best and obsessive at worst.

The little boxes encourage short, compulsive answers that seem workable at the time, but that could result in disaster if not later re-addressed and cleaned up.

Real-life case in point:

The business owner/proposed insured needs coverage for anticipated estate tax liability (we’re talking several million in coverage). Time is of the essence because the clock is running on a good underwriting offer. Everyone is so busy (and hey, who isn’t?) that the advisors and clients can’t get together to talk through the proper structuring the policy.

Finally, the day before the offer will be withdrawn, word comes that for now the policy should be owned by the company (heck, why not, it will be paying the premiums), and the beneficiary will be the insured’s wife. The first of only two items of good news is that, at least, there is coverage in force. The other is that the designations commanded are so short that they fit nicely into the boxes on the application.

Other than that there are several potential problems:
  • An “unholy triangle” had been created. The owner, insured and beneficiary are different parties. Payment of the death benefit to the spouse could create an income taxable event. Depending on the manner in which the company was taxed and some other factors this may not be a problem, but nobody took time to think it through.
  • The joint taxable estate of the insured and his wife stands to increase by the amount of the benefit at his death. Policies purchased to help with estate taxes are held by third parties – usually irrevocable trust whose beneficiaries the same as the insured’s heirs. This takes planning during the underwriting stages of case.
  • No instructions are given regarding who should be the beneficiary if the wife dies first (maybe it is just as well given that there was no more room in the beneficiary box on the application). Depending on the contract language the default beneficiary could be either the owner, or the estate of the insured if they are the same. So now the millions could go into probate court where they are subjected to the expense delay and publicity that attends that process.
Accept three good rules to live by:
  • Be prepared to submit ownership and beneficiary instructions on a separate sheet of paper that is referred to in and is a part of the application.
  • Always submit complete descriptions that include contingent owners and beneficiaries where the primary parties are natural persons.
  • Ask us for help – we will assist as you draft thorough instructions for designation of primary and contingent parties to a policy and will, when necessary, get the blessing of the claims department of the carrier involved.

It always works better when you think outside the box.  Contact Tom Virkler, JD, at 706-614-3796 or tom@cpsadvancedmarkets.com for additional guidance.

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