Uncommon Solutions

President Joe Biden has proposed increasing the highest marginal long-term capital gains tax rate from 20.0% to 39.6%. For those earning $1 million or more annually, the new top rate, along with the net investment income tax, means that federal capital gains tax rates for wealthy investors could exceed 40%. With the proposed increase in capital gains rates, asset location becomes even more critical, and earners subject to the highest rates have likely maximized many of the tax-advantaged account options available. However, for certain qualified investors, there may be an alternative in the form of Private Placement Life Insurance and annuity contracts.

We take a comprehensive look at the amendment to the Internal Revenue Code’s Section 7702. The change, enacted as part of the Consolidated Appropriations Act, 2021 (H.R. 133), redefines how policies qualify as life insurance contracts under the tax code. It also spells out how much cash can accumulate inside a policy without being taxed. We walk you through what to expect and how to navigate this change for your clients.

For over 40 years, the London Inter-Bank Offered Rate (LIBOR) has served as the globally accepted key benchmark interest rate that indicates borrowing costs between banks. However now, amid a flurry of scandal and manipulation, LIBOR will soon be put to bed. In this episode, we explore its potential successors and what effect this change will have on the life insurance premium financing industry.

A new year means new conversations. So when was the last time you talked to your client about the life insurance policy collecting dust in their portfolio? In this episode, we explain the importance of life insurance portfolio review – for you and your client – and why it should be your first call in 2021.

You've heard the ads. Maybe you've done some Googling. Now let's set the record straight. In this episode, we go under the hood on life settlements; from its 1911 origins in the Supreme Court, the AIDs epidemic, and navigating today's market.

There's a lot of Xs and Os in structuring life insurance. In this episode, we talk about its use as a deferred compensation option. Split-dollar life insurance is a trend many top universities are using to retain high-caliber coaches, such as Jim Harbaugh. But its usefulness extends past the coaching ranks. We explain why what's good for Jim, might be good for other key executives.

Schechter’s Kevin Beauchamp recounts a thriller 2019 life insurance premium financing case where, using leverage and an innovative design structure, the client dollars jumped from $12 million to $72 million.

Through tough economic times, life insurance has maintained its value because it is designed with that very goal in mind. Today, amid the COVID-19 global pandemic, this principle applies more than ever.

On Uncommon Solutions, we explore the intersection of creativity and financial services. The podcast is produced by Schechter, a boutique, third generation, financial services firm in Birmingham, MI.