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Advanced Estate Planning

A legacy should never be a burden.

Helping your clients realize their personal financial goals is essential to excellent client service.  Relieving the tax burden for their loved ones when they pass is your duty to their legacy and the trust that they place in your guidance.  Legend uses every tool available in order to innovate more favorable tax scenarios for beneficiaries.  Optimizing under-utilized IRA accounts and rescuing RMD money from higher taxation is a perfect example of how you can help your clients and their families from unnecessary taxation.  In line with our fiduciary first approach, let’s look at a hypothetical case study.

Case Study

The Client Story

Shelly Gardner, age 72, is retired and living comfortably using her husband’s lifetime pension and other retirement assets. Along with these assets, Shelly also has an IRA account valued at $400,000 that she would like to pass onto her daughter, Sue.

The Solution

To create a more tax-efficient situation for Sue to inherit the IRA assets, Shelly chooses to use the Required Minimum Distributions (RMD) she must take at age 72 from her IRA.

This RMD will be used to fund an index universal life policy that includes a no-lapse guarantee.

The Result in Numbers

In this hypothetical scenario, Sue would receive a tax-free death benefit of $462,025 after Shelly’s passing versus the $280,000 she would have received from the IRA alone (assuming a 30% tax bracket for Sue).

Sue would also receive the remaining residual value of the IRA balance, which starts at $385,400 after the RMD withdrawal and becomes $269,780 after income taxes of $115,620 are accessed.  After one year, Sue would then receive a total of $731,805 in assets from the death benefit and IRA.

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