2 Secret Ways to Own Life Insurance

Hey listen, today I'm going to show you two secret ways on how to own life insurance in a way that creates generational wealth and avoids taxation because of proper planning. So listen, today we're going to talk about two secret ways. The truth is, it's not secret. Let's call it disciplined ways. Let's call it for the folks that take that extra level of education, bringing the proper people around them. Because listen, for some of you entrepreneurs out there, you're getting bigger and your business is growing and if you're not careful and you don't really do proper planning, what could happen is that money could evaporate from one generation to the next and the magic of life insurance prevents the evaporation of your money and makes sure that it goes to the next generation and creates even more opportunities. And that's how the wealthy stay wealthy. We're going to get into it a little bit today. So the first way to own life insurance is trust-owned life insurance. I'm going to read the definition real fast. A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to the property or assets for the benefit of a third party, which is the beneficiary. So quick story, a dear friend of mine, one of my clients that was a mentor, business genius, multiple businesses, owned a transportation company as well as 180 different rental properties and he had trusts set up all over the place. One of them we did was a life insurance trust. And when he shuffled off this mortal coil prematurely, very healthy person, and all of a sudden things just turned really fast, his family in the trust received approximately a $9 million check, which means that money forever, eventually from an estate tax standpoint, is not going to be taken away by the government. And that's what we're talking about, a trust-owned life insurance policy, which by the way requires a little bit of extra work. You've got to make sure your fiduciary, your insurance agent, your lawyer, and your accountant is on the same page, but if you do that, you could create generational wealth. So I just told you a quick story about a very good friend of mine and basically he was the insured in this situation. In other words, if he was to pass away, which he did, may God rest his soul, the entity, which was the life insurance trust, got paid the death benefit. And then from there, the entity can pay out anyone, meaning who's the trustees, what does the family trust look like, the wife, the children, the grandchildren, there's certain little nuances, rules and regulations on how to do that, longer conversation privately, but there's ways to access the money without jeopardizing the trust, and last but not least, it has to be administered, you want to get the right kind of attorney, an estate attorney that does the administration for the trust, because as time goes on and the laws do change, there's certain questions that you're going to need to answer at all times. So real quick, let me show you how trust-owned life insurance provides legal protection. Here's the definition. Trust can be used to provide legal protection, to set up a system, you always want systems, after one's death, to reduce paperwork, and in some cases, avoid or reduce inheritance or estate taxes. So for example, if I'm worried about what's going to happen with my wife and children, and if I set this up, I have what they call post-mortem control, in other words, I'm setting up a system that allows them, uninterrupted financially, to live the lives that they want to live. And if it's done the right way, what this is really saying is you don't want to have to go to probate when it comes to somebody's death and it comes to money being dispersed, because this is outside of probate, and it directly goes into the trust, and once the trust is set up, there's language in the trust that ties into these systems. This is a real important thing to understand, and by the way, if you always have any questions, you can always comment in the questions below, or if you have any comments, that'd be great, but at the end of the day, this is important to understand what that looks like. All right, so let me just give you a quick example of what I'm talking about, and hypothetically speaking, let's say somebody's worth, a couple's worth $100 million, right? You have what they call the estate tax exemption, which means per spouse, under current law, 2021, each spouse basically gets a credit of about $11 million, right? So, 11 plus 11 is 22 million, and if somebody's worth 100 million and they both pass away, the difference between 100 million and 22 million, right, whatever that number is, 78, will get taxed at somewhere between 30, 40, or 50 percent, based on current law. So in 2026, the sunset provision says that estate tax exemption per spouse is going to go back down to about 5.5 million per spouse, which basically means that the only credit that they have is up to 11 million instead of currently 22 million. The point I'm trying to make here is if you understand the importance of how what you do today can help save so much money later on in the proper kind of trust with the proper attorneys that has that flexibility and can take advantage no matter what happens with the tax law, that's why it's so important to understand this when it comes to your money, your generational wealth. And most importantly, listen, if you create all this money, do you really want to give your kids $100 million? Maybe, I don't know. But do you want to kind of go to charities or anything else? Maybe. But the question is, can you control how your kids and your spouse receives the money by doing it this way? And the answer is yes. Real quick, hypothetically speaking, keeping it real simple, a couple's worth $100 million, but they have the $22 million credit, right? That 78 is going to get taxed at 40 percent, right? However, if in fact they set up trusts and it's going per spouse, later on, instead of getting taxed on $78 million, they can only get taxed on $20, $30, or $40 million because they've done a proper plan and anything inside that trust, as that trust grows, is not going to be part of estate taxes and it's going to be outside of probate. All right, folks, so check this out. This is corporate-owned life insurance, insure yourself against executive losses. Now, let me just speak in general terms. This is much deeper of a conversation that requires much more time and it's different based on each owner of the business. But with that being said, let's go high level. If you have folks that work for you and you don't want to lose those folks, you may set up a key man policy, right? So the company owns the policy, the insured, the key man, you could be setting up something for them or their family, but it keeps them close to the company because you've done this for them, number one. And number two, God forbid, if they did shuffle off this mortal coil prematurely, the company would get paid based on that person's economic value to the company, right? So that's a key man, key woman, just keep that in mind. You also have these section 162 double bonus plans, complicated, but basically the company pays the employee for the insurance, including the tax on that via a bonus. And this is something that creates an employee to want to stay with you instead of going to your competition down the block, right? A lot of banks use this too, bank-owned life insurance, it's called BOLI. And what that does is these corporate executives, they stay on based on these policies. And by the way, the assets in some of these policies, if it's done the right way, is an asset for the corporation. Once again, more complicated conversation, I don't want to send the mixed message here. And if you have any questions and or comments, feel free to do it below. Thank you for listening to the video. Once again, we're bringing this out every day, content, new information to educate you. But specific to what we just talked about, corporate-owned life insurance, if you really want to dig deep, there's no obligation on your part. If you want to dig deep and learn more about it, we have a team of 25 people that are here to answer any questions that you may have. Go ahead and click that link below, and we'd love to have the conversation with you. Hey, listen, I hope you really enjoyed learning a little bit about these two hacks. Very powerful if you can really dig deep into it. Go ahead and hit that subscribe button, don't forget to ring the bell, and check out this video right over here. So check this out. Let me show you how trust-owned provides... How trust-owned life insurance provides it. All right, so real quick...