Turn Annuities Into Tax-free Long-Term Care Funding!

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Every year, every squirrel collects and stores thousands of acorns in many locations. So many that they lose track of some of the hiding places. As a result, each spring millions of unrecovered acorns begin to grow in uncrowded areas, assuring the next generation of oak trees.

It’s called symbiosis, a close relationship between two parties for the benefit of both.

And you can create a symbiotic relationship for some of your clients who have two concerns that, left alone, create tax disadvantages, to wit:
  • Withdrawals of gain from non-qualified deferred annuities are taxable.
  • Self-funded long-term care expenditures are often non-deductible.

But the Pension Protection Act of 2006 allows a tax-saving symbiosis for clients who own non-qualified annuities and anticipate the need for long-term care.

Consider:
  • Existing non-qualified annuities can be exchanged on a non-taxable basis for approved annuities that allow for tax-free distributions if used to pay long-term care expenses.
  • Underwriting is super-simplified requiring a negative response to only five questions dealing with extreme health issues.
  • A spouse can be added and covering his/her expenses on the same tax-advantaged basis.
  • Until needed the annuity continues to grow like a normal non-qualified product.
  • If unneeded for care, the funds are available for use or to pass on in the form of a gift or bequest.
  • Annuity owners have access to advice and counsel regarding recommended services and appropriate sources for care.

By helping your clients exchange for approved annuities, we can help them make maximum use of annuity accounts by lightening their tax burden should a long-term care event occur. Bring all your clients’ long-term care planning to us.

For What It’s Worth – Oak trees are the most common and widespread hardwood in the U.S. numbering in the tens of billions. The gray squirrel population is around 40 million. But even counting all the other 64 species, every squirrel family is assured of having its own tree or two!