“Wow, Dad and Mom thought of everything.”
Are you using these strategies to minimize taxes and leave more to your loved ones and special causes?

A recent Boston College study reports that $8 – $11 trillion will be passed on to the next generation over the next two decades. How much of that will be passed on inefficiently, and how much will unnecessarily go to Uncle Sam instead of to children and grandchildren is difficult to calculate.


One problem is a lack of information. For example, did you know that an inherited IRA is one of the worst ways to leave money to heirs? Families have unknowingly positioned themselves in the bulls-eye of the tax collector. Sage Financial Partners can show you how to leave a greater legacy for future generations while minimizing taxes.


Case Study #1:

Challenge: Businessman wants to leave a $10 million legacy to his two children, but prefers not to liquidate other assets to fund it.


Solution: Use premium financing to purchase a $10 million life insurance policy in a trust (to protect against estate taxes). Premium financing allows for no out-of-pocket costs for the businessman, who uses a portion of his equities portfolio as collateral against the loan. Legacy will be income tax-free for the children.


Case Study #2:

Challenge: Two healthy 70-year-old parents have a goal to leave $1 million to their children and $1 million to their favorite university. They have $1 million invested in the stock market. They realize they need to double their savings, but are even more concerned about losing money in a volatile market.


Solution: Take advantage of the gift tax exclusion to gift $1 million to the kids. The kids use the $1 million to buy a survivorship life insurance policy. Upon the death of the second parent, the insurance company pays a $4 million benefit. The children get $3 million (versus $1 million in the original scenario), income tax-free. The charity receives $1 million as planned. Stock market risk is avoided.


Click here to start a conversation about Legacy & Estate Planning.