|
Solutions for you and your family
When it comes to financial matters, it's easy to see where you want to go. It's harder to figure out how to get there. Whether you're saving for retirement, investing for the future, funding a college education or reaching for any of a hundred other financial goals, we can help.
Solutions for your business
For your business to reach its full potential, you need to understand the financial tools at your disposal. We can apply our expertise to help your business succeed.
Financial Planning
A dynamic approach to helping you and your family reach your financial goals
We use financial planning tools and resources to help you and your family reach your financial goals.
We provide expertise in the six areas with the biggest impact on your personal financial situation, and develop plans
and strategies to help you succeed.
We help you identify where you want to go, and show you how to get there, turning financial planning into a powerful force for you.
- Current Financial
Position: The first step involves getting a snapshot of where things are today, including assets, liabilities, net worth and cash flow.
- Protection Planning:
Financially protecting yourself and your family from death, disability, accident and illness
- Investment Planning:
Developing an approach to accumulating and managing assets in a way that helps you reach your goals.
- Tax Planning:
Strategies to help you retain assets and minimize payment
of unnecessary taxes.
- Retirement Planning:
Creating accumulation and income strategies that help you achieve a financially secure retirement.
- Estate Planning:
Strategies for preserving and distributing assets to heirs in a way that fits your goals and desires, while minimizing estate taxes, probate expenses and estate administrative costs.
Return to Top
Current Financial Position
Understanding your current financial situation is one of
the most important aspects of doing financial planning. Your
current assets, liabilities, liquidity and cash flow will
affect almost every other short or long-term goal that you
have.
Many people don’t realize the long-term impact of the financial
decisions they make on a day-to-day basis. Your financial
needs in the event of a death or disability will be closely
related to your current situation, and areas such as income
tax liability, asset allocation, estate tax liability, ownership
status of assets, and control of assets are all inter-related.
If you already have a good understanding of your current
financial situation, congratulations! If you could benefit
from a greater understanding of where you stand today, there
are numerous ways that you can begin.
Use worksheets to calculate your net worth and track your
cash flow. Personal finance programs such as Quicken™ or MS
Money™ are also helpful in gaining a better understanding
of where you stand today.
For help in identifying strengths and weaknesses in your
current financial picture, or for help in developing a comprehensive
financial plan, select the "Contact Us" option located in
the main site menu at the top of the page. Our Financial Advisors
are just a click away!
Return to Top
Protection Planning
Protecting your family from major financial risks is one
of the cornerstones of any sound financial program. Life insurance,
disability insurance, health coverage and long-term care insurance
should all be evaluated to help minimize your exposure to
financial risk.
By working with a knowledgeable Financial Advisor, you can
develop a comprehensive approach to assessing your need for
additional coverage. To help you get started, click on the
Financial Calculators link located in the main site menu at
the top of the page.
While there are more complicated systems for calculating
your insurance needs, this provides you with an indicator
of whether you should consider increasing your life insurance
coverage.
Return to Top
Investment Planning
Managing risk in your investments
Successful investing is based on managing risk — understanding
what risk means and using it to your advantage.
Risk refers to the chance that an investment's value or return
will be lower than expected. Investments with potential for
greater loss are viewed as riskier than those with a lesser
chance of loss.
However, the risks associated with investments differ in
the long-term compared to the short-term. In the long-term,
so-called "risky" investments may offer a greater chance of
reaching a financial objective.
Risk Levels
For example, a government bond that guarantees a return of
principal and $100 interest after 30 days is risk-free in
the short term, since the return will always be $100 regardless
of events in the financial markets, if held to maturity. In
contrast, common stock may have the potential of earning as
much as $200 and as little as $0 and offer no protection of
principal.
In the long-term, the picture changes. Based on historical
stock performance, risk faced by stocks declines over the
long-term. The risk faced by government bonds increases, however,
since their long-term returns they offer are frequently outperformed
by other types of investments and may not always keep up with
inflation and taxes.
The risk and return of any one investment should be viewed
in relation to your total investment portfolio — the combination
of investments you’re making. If you hold just one or two
accounts, you are more exposed to risk than if your money
is more widely diversified. Diversification means investing
in instruments which behave differently during a given economic
situation or time period.
A Financial Advisor can help you determine an appropriate
level of risk and diversification for your financial goals,
profile and time horizon. Talk to an advisor or representative
today about developing a customized investment strategy.
Return to Top
Tax planning
As Ben Franklin aptly pointed out over two centuries ago,
taxes are one of the certainties of life. Our challenge is
to use the provisions of the tax code to our advantage wherever
possible.
For example, income can be from earned (employment) or unearned
(investment) sources, and can be taxed today, taxed later
(deferred) or not taxed at all (exempt). How we decide to
hold our assets and receive our income will have the greatest
impact on our income taxes.
Everyone knows that the U. S. tax code is extremely complex.
Many types of assets (tax-exempt bonds, IRAs, annuities, and
cash-value life insurance to name several) offer significant
tax advantages. Working with a financial advisor who understands
the tax implications of your financial decisions will help
assure that you are making those decisions with all the pertinent
information, often resulting in significant tax savings. For
help in identifying strategies to reduce your taxes, or for
help in developing a comprehensive financial plan, contact
one of our knowledgeable Financial Advisors today.
This information is a general discussion of the relevant federal tax laws. It is not
intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties.
This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer.
Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues
applicable to their specific circumstances.
Return to Top
Retirement planning
Plans help address the changing concept of retirement
The concept of retirement is changing. And so are the ways
that people prepare for it. For some, retirement means lots
of leisure time to pursue hobbies and interests. For others
it means a change to part time work, and still others will
spend their new found free time with family members or as
a volunteer in the community.
Whatever your plans for retirement may be, you have a valuable
tool at your fingertips to help you prepare financially for
what could be the most rewarding part of your life. This tool
is your retirement plan. Many retirement programs offer investment
options to choose from, and contributions can come from your
employer, you or both to provide the accumulation you need
to save for the future.
Three retirement savers
Sid Saver, 25, has a long way to go before his golden years.
With an income of $25,000 in the early stages of his career,
Sid's working with an eye to the future. If Sid defers just
4.7 percent of his annual income to his 401(k), he could retire
with 80 percent of his annual salary*, adjusted for inflation.
And, Sid's tolerance for risk is high, given his long time
horizon. He'll allocate his money into an aggressive portfolio
made up of equity investments.
Debra Due Diligence, 35, hasn't started contributing to her
pension plan, opting instead to save $25,000 in an IRA plan,
and that may help offset possible foregone earnings. She'll
have to put more than 12.1 percent away in order to enjoy
80 percent* of her $35,000 income at retirement. Deb will
put her money into a moderately aggressive portfolio with
20 percent in fixed income and 80 percent in equity.
Pete Procrastinator has waited even longer. At age 48, he's
earning $50,000 per year as an editor for a small publishing
company. But he has only saved $5,000 in an IRA. Pete would
have to save more than 30 percent of his before-tax income
in order to retire with just 80 percent* of his current income.
That's more than the law allows, so Pete would have to use
another savings vehicle, as well. Pete's not too worried,
though. He plans to continue working part time after age 65,
and will invest 12 percent into a moderate portfolio, with
40 percent of funds going to a fixed income group and 60 percent
going to an equity group.
No matter where you are in your career, a retirement program
offers a wide range of investment options.
The most important thing you need to do is use it. Here's
a review of the three hypothetical retirement examples:
*Assumes a 3.5 percent inflation rate, investment
growth of eight percent before and six percent after retirement,
no employer-contribution pension plan and standard calculated
Social Security income. These are hypothetical examples for
illustrative purposes only and are not indicative of any particular
investment.
Developing a strategy for a financially secure retirement
is no simple task. That's why an experienced professional's
knowledge and objectivity can make this important challenge
more manageable.
Return to Top
Estate planning
Helping you protect your legacy
No matter how large your estate is, a sound estate plan remains
the best assurance that your assets will be distributed to
the heirs you select in the way you choose. It can also help
protect your financial security if you become incapacitated.
While reducing taxes can be an important goal, it’s not the
only reason to develop an estate plan. Regardless of what
happens with tax legislation, an estate plan can be an essential
financial planning tool.
As you put together your own estate plan, consider these
elements:
- A will can specify who gets what and name guardians
for minor children.
- Durable powers of attorney allow whomever you choose
to make financial and medical decisions if you become unable
to do so yourself.
- Beneficiary designations on retirement accounts, life
insurance policies and the like must be coordinated with
the rest of your estate plan. Those assets will go to the
listed beneficiaries, regardless of your will.
- Titling of assets also should be coordinated with your
total estate plan. Property owned jointly with right of
survivorship, for instance, typically goes to the survivor,
superseding any instructions in a will.
- Trusts are flexible tools that can be used to manage
investments during your lifetime and beyond, distribute
assets to heirs under circumstances that you spell out,
minimize estate taxes, maintain the privacy of your financial
affairs and protect assets from lawsuits and seizures.
Estate planning can protect your family's interests and
ensure that your wishes are carried out.
What if I don't have a will?
If you die without a will or other testamentary document,
the probate court distributes your estate according to state
laws. About a third of the states have adopted all or part
of the Uniform Probate Code, which provides for the following
structure for distributing property if you die without developing
an estate plan (intestate):
- If there is a surviving spouse and no surviving children
or surviving parent of decedent, all property passes to
the spouse.
- If there is no surviving children but decedent is
survived by a parent or parents, the first $50,000, plus
one-half the balance of the estate passes to the surviving
spouse. The remainder passes to the decedent's parents.
- If there is a surviving spouse and surviving children
of both, the first $50,000 plus one-half the balance of
the estate passes to the surviving spouse. The remainder
passes to the surviving children equally.
- If there is no spouse and no children, the property
is divided evenly between your parents. If no parents
are living, it is evenly divided among the descendants
of your parents, namely your siblings.
- If there is no living relative, the property reverts
to the state.
In addition, the probate process is time consuming and
expensive. Consult one of our financial professionals
to learn how to protect your estate.
Return to Top
Business Solutions
To run a successful business, you need to understand
the financial choices available to business owners. At
our firm, we apply our expertise, resources and tools to
find long-term solutions that can help your business grow
and succeed.
Business Continuation
Benefits for key executives
Planning for changes in ownership
Return to
Top
Planning for changes in ownership
You can prepare for the problems that can come
with a change in ownership by using these techniques:
Buy-Sell agreements This is the most common
business continuation planning tool. Life insurance
funds the agreement, which establishes the value
of your business and assures a ready market for
your share in the business after you're gone.
Key Employee
Life Insurance
Provides you with the funds you need to keep your
business running smoothly when you lose a key employee.
Personal estate planning
Carefully incorporating your business needs into
a total estate plan can help you meet estate tax
and liquidity needs to preserve the full value of
your business for your family and associates.
Return to
Business Solutions
Business Planning
Develop a strategy to preserve your business and
your net worth
Effective business continuation is both an "art"
and a science. First and foremost, it is an art.
Because the best business plan always considers
your unique financial goals and objectives, creativity
and customization is required to select and tailor
those strategies best suited to meet your specific
business continuation and benefit needs.
However, business continuation and benefit planning
is also a science. The best business plan should
take into account the tax and legal ramifications
of the various financial strategies adopted.
A Financial Advisor or Registered Representative
will incorporate both the art and science of business
planning in a program recommended to you.
Using business dollars for personal
expenses
These valuable concepts can help:
Split-dollar life insurance
Your corporation can help you pay for your own
life insurance by "advancing" your money to pay
the annual premium. This low-cost benefit can also
be available for key employees.
Disability insurance
Your business can provide you with personal disability
insurance — which continues a portion of your salary
when you're unable to work — and the premiums (in
most cases) are tax deductible.
Section 303 stock redemption
Your business may be able to help you pay estate
taxes and settlement costs if your stock is worth
more than 35 percent of your adjusted gross estate.
Under a Section 303 stock redemption, the business
redeems some stock from your estate to produce cash
to meet your estate's obligations.
How to use employee benefits to
increase income and improve retention of key employees
These concepts can help you get the most out of
your benefit dollars:
Disability salary continuation planning
A salary continuation plan can help protect you,
your key employees and your business from the financial
consequences of a disability. If the plan is funded
with disability insurance policies, premium payments
are considered tax deductible as a necessary business
expense.
Qualified pension and profit-sharing plans
Employee-sponsored retirement programs help employees
prepare for retirement and allow them to take advantage
of special tax breaks. Any contributions you make
to the plan are tax deductible.
Life Rewards
Highly compensated executives are limited in the
amounts they can save for retirement in qualified
plans. Nonqualified plans are available through
Life Rewards and allow associates to enhance their
retirement benefits.
Split-Dollar insurance
Life insurance can be provided to select executives
at a reduced cost through split-dollar insurance
plans.
Golden Executive
Bonus Arrangement(GEBA)
GEBA and other executive bonus strategies provide
life insurance to employees and give your company
a current income tax deduction.
Personal financial analysis
This service helps employees manage their money
more effectively and achieve their personal financial
goals.
Group insurance
Your business can provide a variety of programs,
and the tax deductions generated by the premiums
you pay make the cost of these benefits even lower.
Medical, disability and life insurance are the three
most sought-after programs.
The Art and Science of Business Planning can help
ensure the ongoing success of your business.
Return to
Business Solutions
Key Person Insurance:
Protect your business against the loss of one of
your most vital assets: key employees
Key people are vital to the success of your business.
A Key Person Life Insurance Plan can provide the
funds you need to keep your business running smoothly
after you've lost a key employee through death or
employee turnover.
How Key Person Life Insurance works:
The employer pays premiums for a life insurance
policy on the key employee's life. The employer
is the owner and beneficiary.
The employer can arrange an Exchange of Insurance
Agreement to reduce losses if a key employee leaves
prior to retirement. This allows the employer to
transfer coverage to a successor.
If a key employee dies, the employer receives the
policy's income tax-free death benefit* and can
apply it towards business expenses or losses caused
by the employee's death.
If you employ anyone whose sudden, unexpected absence
would significantly impact your business, consult
with your life insurance agent and financial professionals
about Key Person Life Insurance.
* Subject to the corporate alternative minimum
tax for C corporations.
Return to
Business Solutions
Life Rewards:
Select nonqualified retirement benefits for your
key executives
The benefit program your company offers is critical
to attracting and retaining top employees. Qualified
benefit programs — pension and 401(k) plans — limit
participation by highly compensated executives.
A nonqualified plan is a unique benefit designed
to attract and reward top executives. Life Rewards,
a customized nonqualified benefit program, can strengthen
the tie between your company and its top executives.
You can provide Life Rewards for your key executives
to:
- Secure the services of your most influential
executives that may impact profitability.
- Attract new managers.
- Build loyalty in today's high turnover marketplace.
- Provide a second tier of benefits to highly
compensated executives disadvantaged by qualified
plan limitations.
Three Life Rewards strategies are available:
Executive Deferral Plan
Allows the executive to defer a portion of base
salary, bonus or commissions, which lowers currently
taxable income.
Deferred Bonus Plan
Restricted solely to discretionary employer contributions
and rewards the executive subject to a vesting
schedule you select.
Executive Salary Continuation Plan
Protects against inflation to help your valued
executives achieve a comfortable retirement. Funded
entirely with company dollars.
Life Rewards offer valuable benefits to key executives:
- Lower currently taxable income during their
working years
- A survivor benefit for their family
- Tax deferred growth of retirement assets
- Parity for executives limited by qualified
plan restrictions
Who can sponsor a nonqualified Life Rewards
plan?
Any company can establish a nonqualified Life
Rewards plan. C corporations best complement
the tax advantages of a nonqualified plan; however,
nonshareholders of an S corporation also benefit.
Other entities such as a limited liability company,
limited liability partnership, sole proprietorship
or partnership may also sponsor a nonqualified
plan for select nonowner executives.
Life insurance?
Life insurance is the most commonly used informal
funding vehicle for nonqualified benefits because
of the death benefit it provides and its tax-advantaged
status. Your company will be the owner and beneficiary
of the life insurance policy, which insures
the executive participant in the plan.
Return
to Business Solutions
Golden Executive Bonus Arrangement
(GEBA):
A compensation tool designed to reward select
executives with cash value life insurance
Attracting, motivating and retaining key executives
takes a competitive compensation package that
includes more than a salary and a bonus. Until
recently, government regulations made it almost
impossible to single out and reward those employees
you value most.
The Golden Executive Bonus Arrangement (GEBA)
can be a solution for rewarding and retaining
your most valued executives. This tool gives
your company a current income tax deduction
through the purchase of cash value life insurance,
while maintaining control to encourage an executive
to stay with your company.
Other advantages of life insurance funded GEBA
include:
- You decide who participates
- You can tailor it to the needs of each
executive
- It is income tax-deductible for your company
- You can adjust the benefit to meet your
future needs
- It is easy to get started
If you're looking for an executive compensation
tool that helps you retain one or more key
executives, consider using life insurance
in a GEBA.
Return
to Business Solutions
Business estate planning:
How to preserve your life's work
You've spent a lifetime building your business.
Take a moment to make sure that your hard
work will survive the death of you or one
of your partners.
As the owner of a closely-held business,
much of your wealth is probably tied up
in the business. While returning earned
income back into the business helps finance
growth, it can cause severe liquidity problems
for your estate when you die. After paying
probate and estate taxes, your estate and
surviving family members also may encounter
liabilities that become payable upon your
death. They may also face the potential
of decreased business earnings, due to your
absence.
There are ways to overcome these liquidity
problems. Business-oriented planning tools
can help reduce estate taxes and make the
best use of the cash available. The most
common business estate-planning tools are
buy-sell agreements, Section 303 stock redemptions,
Section 6166 estate tax deferrals and the
qualified family-owned business exclusion.
Business-owned life insurance can be used
to fund each of these planning methods.
Buy-Sell Agreements
Buy-sell agreements can establish the value
of your business for estate-tax purposes
and improve your estate's liquidity by assuring
a ready market for your business upon your
death. These agreements also protect business
partners from sharing ownership with a deceased
stockholder's family.
There are two main forms of buy-sell agreements:
cross-purchase and stock redemption. In
an insurance-funded cross-purchase arrangement,
each business owner buys an insurance policy
on the other, naming themselves as beneficiary.
At the death of one of the owners, the surviving
owner receives tax-free insurance proceeds
to use in purchasing the deceased owner's
stock from his or her estate.
In an insurance-funded stock-redemption
arrangement, the corporation purchases the
stock of a deceased shareholder. Here the
business is the owner and beneficiary of
life insurance policies on each shareholder.
A partnership looking for a business continuation
plan may use a similar arrangement called
an entity purchase.
A buy-sell agreement that is funded with
life insurance will benefit:
Your Family:
- Prevents conflict with surviving owners
- Ensures that your family receives
a fair price for your business
- May set the value of your business
for estate-tax purposes
- Provides needed cash
Your Business:
- Keeps new and/or unwanted owners
out of the business
- Prevents disputes
- Ensures continuity and orderly transfer
of ownership
- May provide tax-free cash to purchase
stock
Section 303 Redemptions
Section 303 of the Internal Revenue
Code gives your estate a one-time opportunity
to remove cash or other property from
your business, at little or no tax cost,
through a partial redemption of your
stock. This can provide the liquidity
your survivors need to pay funeral costs,
estate and administrative expenses,
and state and federal death taxes.
To be eligible for a Section 303 redemption,
the stock value must exceed 35 percent
of your estate. The maximum amount that
can be paid under such a plan equals
the total amount of the federal estate
tax, state death taxes, funeral and
administrative expenses. Corporate-owned
life insurance can be used to fund the
redemption. Under this arrangement,
your business purchases an insurance
policy on your life and at your death
uses the tax-free proceeds to buy enough
stock from your estate to cover death
expenses and taxes.
Section 6166
An estate tax burden can force the
liquidation of a closely-held business.
Internal Revenue Code Section 6166 was
designed to prevent this liquidation.
If the business interest constitutes
more than 35 percent of your adjusted
gross estate, under Section 6166 the
executor may elect to pay the estate
tax attributable to the value of the
business in 10 annual installments,
beginning no later than five years after
the date of your death.
There are a number of requirements
you'd have to meet to be eligible for
the Section 6166 extension. If your
estate qualifies, life insurance offers
an economical way to pay these installments.
Qualified Family-Owned Business
Exclusion
If your business qualifies as "family
owned," you may be able to exclude part
of it from estate taxation. The amount
you can exclude is $675,000 if the death
of the estate owner occurs in 1998.
That qualifying amount gradually decreases
over time to $300,000 if the death occurs
in the year 2006 or later. Your business
qualifies as family owned if the business
comprises more than 50% of your total
estate and you pass the estate on to
a "qualified heir." A qualified heir
is generally defined as a spouse, child,
grandchild or other descendent. Your
heirs, however, should realize that
they have to hang onto the business
for at least 10 years following such
an estate transfer. If they don't, they
may have to pay the full estate taxes
that were avoided. Life insurance can
provide your heirs with the cash necessary
to pay estate taxes whether or not you
qualify for this exclusion.
Business Valuation for Estate Planning
No matter what technique you select
for your company, determining the value
of the business is a key step in the
estate planning process. Why? First,
in the case of a buy-sell agreement,
you need to know the value of the business
to determine the price and fund the
agreement. Second, because the business
is part of your estate, the valuation
is needed to estimate the estate taxes;
this helps you calculate the cash or
liquidity needed to administer the estate.
Finally, the value of the business must
be reported on the estate tax return
when the owner dies.
Return
to Business Solutions
Business continuation
planning:
Prepare for the continued success of
your business after you're gone.
Business continuation planning tools
can help you avoid the problems that
can occur when a business owner dies.
A life insurance funded business continuation
plan provides a wide variety of benefits
for your family and the business.
For your family:
- Prevents conflict with surviving
owners
- Assures a fair price for the business
- May set the value of your business
for federal estate tax purposes
- Can provide cash for your estate
For the business:
- Allows you to maintain control
of the business
- Prevents disputes
- Assures orderly transfer of
the business upon death
- Provides an income tax-free
death benefit to purchase shares
of the business
Several business continuation
plans are available:
Cross Purchase Plan
An agreement between co-owners
of a business. Surviving owners
purchase pro rata shares of the
deceased owner's stock from the
estate. To fund the purchase, each
stockholder owns, pays premium on
and is the beneficiary of an appropriate
amount of life insurance on the
other owners.
Stock Redemption/Entity Purchase
Plan
The business becomes obligated
to purchase the stock or partnership
share of a deceased shareholder
or partner. The business owns, pays
premium on and is the beneficiary
of life insurance on each shareholder
or partner.
LifeCycle Buy-Sell
Combines the benefits of the traditional
stock redemption and cross purchase
methods. Provides several benefits,
including the ability to supplement
retirement income and allocate the
premiums as desired.
Section 303 Stock Redemption
Plan
A special type of stock redemption
plan that can provide cash to the
estate of a deceased shareholder
in a tax-favored manner. Allows
a corporation to redeem a deceased
shareholder's stock without incurring
income taxable dividends. The potential
for dividend taxation upon a
Solutions for you and your family
When it comes to financial matters, it's easy to see where you want to go. It's harder to figure out how to get there. Whether you're saving for retirement, investing for the future, funding a college education or reaching for any of a hundred other financial goals, we can help.
Solutions for your business
For your business to reach its full potential, you need to understand the financial tools at your disposal. We can apply our expertise to help your business succeed.
Financial Planning
A dynamic approach to helping you and your family reach your financial goals
We use financial planning tools and resources to help you and your family reach your financial goals.
We provide expertise in the six areas with the biggest impact on your personal financial situation, and develop plans
and strategies to help you succeed.
We help you identify where you want to go, and show you how to get there, turning financial planning into a powerful force for you.
- Current Financial
Position: The first step involves getting a snapshot of where things are today, including assets, liabilities, net worth and cash flow.
- Protection Planning:
Financially protecting yourself and your family from death, disability, accident and illness
- Investment Planning:
Strategies to help you retain assets and minimize payment of unnecessary taxes.
- Tax Planning:
Strategies to help you retain assets and minimize payment
of unnecessary taxes.
- Retirement Planning:
Creating accumulation and income strategies that help you achieve a financially secure retirement.
- Estate Planning:
Strategies for preserving and distributing assets to heirs in a way that fits your goals and desires, while minimizing estate taxes, probate expenses and estate administrative costs.
Return to Top
Current Financial Position
Understanding your current financial situation is one of
the most important aspects of doing financial planning. Your
current assets, liabilities, liquidity and cash flow will
affect almost every other short or long-term goal that you
have.
Many people don’t realize the long-term impact of the financial
decisions they make on a day-to-day basis. Your financial
needs in the event of a death or disability will be closely
related to your current situation, and areas such as income
tax liability, asset allocation, estate tax liability, ownership
status of assets, and control of assets are all inter-related.
If you already have a good understanding of your current
financial situation, congratulations! If you could benefit
from a greater understanding of where you stand today, there
are numerous ways that you can begin.
Use worksheets to calculate your net worth and track your
cash flow. Personal finance programs such as Quicken™ or MS
Money™ are also helpful in gaining a better understanding
of where you stand today.
For help in identifying strengths and weaknesses in your
current financial picture, or for help in developing a comprehensive
financial plan, select the "Contact Us" option located in
the main site menu at the top of the page. Our Financial Advisors
are just a click away!
Return to Top
Protection Planning
Protecting your family from major financial risks is one
of the cornerstones of any sound financial program. Life insurance,
disability insurance, health coverage and long-term care insurance
should all be evaluated to help minimize your exposure to
financial risk.
By working with a knowledgeable Financial Advisor, you can
develop a comprehensive approach to assessing your need for
additional coverage. To help you get started, click on the
Financial Calculators link located in the main site menu at
the top of the page.
While there are more complicated systems for calculating
your insurance needs, this provides you with an indicator
of whether you should consider increasing your life insurance
coverage.
Return to Top
Investment Planning
Managing risk in your investments
Successful investing is based on managing risk — understanding
what risk means and using it to your advantage.
Risk refers to the chance that an investment's value or return
will be lower than expected. Investments with potential for
greater loss are viewed as riskier than those with a lesser
chance of loss.
However, the risks associated with investments differ in
the long-term compared to the short-term. In the long-term,
so-called "risky" investments may offer a greater chance of
reaching a financial objective.
Risk Levels
For example, a government bond that guarantees a return of
principal and $100 interest after 30 days is risk-free in
the short term, since the return will always be $100 regardless
of events in the financial markets, if held to maturity. In
contrast, common stock may have the potential of earning as
much as $200 and as little as $0 and offer no protection of
principal.
In the long-term, the picture changes. Based on historical
stock performance, risk faced by stocks declines over the
long-term. The risk faced by government bonds increases, however,
since their long-term returns they offer are frequently outperformed
by other types of investments and may not always keep up with
inflation and taxes.
The risk and return of any one investment should be viewed
in relation to your total investment portfolio — the combination
of investments you’re making. If you hold just one or two
accounts, you are more exposed to risk than if your money
is more widely diversified. Diversification means investing
in instruments which behave differently during a given economic
situation or time period.
A Financial Advisor can help you determine an appropriate
level of risk and diversification for your financial goals,
profile and time horizon. Talk to an advisor or representative
today about developing a customized investment strategy.
Return to Top
Tax planning
As Ben Franklin aptly pointed out over two centuries ago,
taxes are one of the certainties of life. Our challenge is
to use the provisions of the tax code to our advantage wherever
possible.
For example, income can be from earned (employment) or unearned
(investment) sources, and can be taxed today, taxed later
(deferred) or not taxed at all (exempt). How we decide to
hold our assets and receive our income will have the greatest
impact on our income taxes.
Everyone knows that the U. S. tax code is extremely complex.
Many types of assets (tax-exempt bonds, IRAs, annuities, and
cash-value life insurance to name several) offer significant
tax advantages. Working with a financial advisor who understands
the tax implications of your financial decisions will help
assure that you are making those decisions with all the pertinent
information, often resulting in significant tax savings. For
help in identifying strategies to reduce your taxes, or for
help in developing a comprehensive financial plan, contact
one of our knowledgeable Financial Advisors today.
This information is a general discussion of the relevant federal tax laws. It is not
intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties.
This information is provided to support the promotion or marketing of ideas that may benefit a taxpayer.
Taxpayers should seek the advice of their own tax and legal advisors regarding any tax and legal issues
applicable to their specific circumstances.
Return to Top
Retirement planning
Plans help address the changing concept of retirement
The concept of retirement is changing. And so are the ways
that people prepare for it. For some, retirement means lots
of leisure time to pursue hobbies and interests. For others
it means a change to part time work, and still others will
spend their new found free time with family members or as
a volunteer in the community.
Whatever your plans for retirement may be, you have a valuable
tool at your fingertips to help you prepare financially for
what could be the most rewarding part of your life. This tool
is your retirement plan. Many retirement programs offer investment
options to choose from, and contributions can come from your
employer, you or both to provide the accumulation you need
to save for the future.
Three retirement savers
Sid Saver, 25, has a long way to go before his golden years.
With an income of $25,000 in the early stages of his career,
Sid's working with an eye to the future. If Sid defers just
4.7 percent of his annual income to his 401(k), he could retire
with 80 percent of his annual salary*, adjusted for inflation.
And, Sid's tolerance for risk is high, given his long time
horizon. He'll allocate his money into an aggressive portfolio
made up of equity investments.
Debra Due Diligence, 35, hasn't started contributing to her
pension plan, opting instead to save $25,000 in an IRA plan,
and that may help offset possible foregone earnings. She'll
have to put more than 12.1 percent away in order to enjoy
80 percent* of her $35,000 income at retirement. Deb will
put her money into a moderately aggressive portfolio with
20 percent in fixed income and 80 percent in equity.
Pete Procrastinator has waited even longer. At age 48, he's
earning $50,000 per year as an editor for a small publishing
company. But he has only saved $5,000 in an IRA. Pete would
have to save more than 30 percent of his before-tax income
in order to retire with just 80 percent* of his current income.
That's more than the law allows, so Pete would have to use
another savings vehicle, as well. Pete's not too worried,
though. He plans to continue working part time after age 65,
and will invest 12 percent into a moderate portfolio, with
40 percent of funds going to a fixed income group and 60 percent
going to an equity group.
No matter where you are in your career, a retirement program
offers a wide range of investment options.
The most important thing you need to do is use it. Here's
a review of the three hypothetical retirement examples:
*Assumes a 3.5 percent inflation rate, investment
growth of eight percent before and six percent after retirement,
no employer-contribution pension plan and standard calculated
Social Security income. These are hypothetical examples for
illustrative purposes only and are not indicative of any particular
investment.
Developing a strategy for a financially secure retirement
is no simple task. That's why an experienced professional's
knowledge and objectivity can make this important challenge
more manageable.
Return to Top
Estate planning
Helping you protect your legacy
No matter how large your estate is, a sound estate plan remains
the best assurance that your assets will be distributed to
the heirs you select in the way you choose. It can also help
protect your financial security if you become incapacitated.
While reducing taxes can be an important goal, it’s not the
only reason to develop an estate plan. Regardless of what
happens with tax legislation, an estate plan can be an essential
financial planning tool.
As you put together your own estate plan, consider these
elements:
- A will can specify who gets what and name guardians
for minor children.
- Durable powers of attorney allow whomever you choose
to make financial and medical decisions if you become unable
to do so yourself.
- Beneficiary designations on retirement accounts, life
insurance policies and the like must be coordinated with
the rest of your estate plan. Those assets will go to the
listed beneficiaries, regardless of your will.
- Titling of assets also should be coordinated with your
total estate plan. Property owned jointly with right of
survivorship, for instance, typically goes to the survivor,
superseding any instructions in a will.
- Trusts are flexible tools that can be used to manage
investments during your lifetime and beyond, distribute
assets to heirs under circumstances that you spell out,
minimize estate taxes, maintain the privacy of your financial
affairs and protect assets from lawsuits and seizures.
Estate planning can protect your family's interests and
ensure that your wishes are carried out.
What if I don't have a will?
If you die without a will or other testamentary document,
the probate court distributes your estate according to state
laws. About a third of the states have adopted all or part
of the Uniform Probate Code, which provides for the following
structure for distributing property if you die without developing
an estate plan (intestate):
- If there is a surviving spouse and no surviving children
or surviving parent of decedent, all property passes to
the spouse.
- If there is no surviving children but decedent is
survived by a parent or parents, the first $50,000, plus
one-half the balance of the estate passes to the surviving
spouse. The remainder passes to the decedent's parents.
- If there is a surviving spouse and surviving children
of both, the first $50,000 plus one-half the balance of
the estate passes to the surviving spouse. The remainder
passes to the surviving children equally.
- If there is no spouse and no children, the property
is divided evenly between your parents. If no parents
are living, it is evenly divided among the descendants
of your parents, namely your siblings.
- If there is no living relative, the property reverts
to the state.
In addition, the probate process is time consuming and
expensive. Consult one of our financial professionals
to learn how to protect your estate.
Return to Top
Business Solutions
To run a successful business, you need to understand
the financial choices available to business owners. At
our firm, we apply our expertise, resources and tools to
find long-term solutions that can help your business grow
and succeed.
Business Continuation
Benefits for key executives
Planning for changes in ownership
Return to
Top
Planning for changes in ownership
You can prepare for the problems that can come
with a change in ownership by using these techniques:
Buy-Sell agreements This is the most common
business continuation planning tool. Life insurance
funds the agreement, which establishes the value
of your business and assures a ready market for
your share in the business after you're gone.
Key Employee
Life Insurance
Provides you with the funds you need to keep your
business running smoothly when you lose a key employee.
Personal estate planning
Carefully incorporating your business needs into
a total estate plan can help you meet estate tax
and liquidity needs to preserve the full value of
your business for your family and associates.
Return to
Business Solutions
Business Planning
Develop a strategy to preserve your business and
your net worth
Effective business continuation is both an "art"
and a science. First and foremost, it is an art.
Because the best business plan always considers
your unique financial goals and objectives, creativity
and customization is required to select and tailor
those strategies best suited to meet your specific
business continuation and benefit needs.
However, business continuation and benefit planning
is also a science. The best business plan should
take into account the tax and legal ramifications
of the various financial strategies adopted.
A Financial Advisor or Registered Representative
will incorporate both the art and science of business
planning in a program recommended to you.
Using business dollars for personal
expenses
These valuable concepts can help:
Split-dollar life insurance
Your corporation can help you pay for your own
life insurance by "advancing" your money to pay
the annual premium. This low-cost benefit can also
be available for key employees.
Disability insurance
Your business can provide you with personal disability
insurance — which continues a portion of your salary
when you're unable to work — and the premiums (in
most cases) are tax deductible.
Section 303 stock redemption
Your business may be able to help you pay estate
taxes and settlement costs if your stock is worth
more than 35 percent of your adjusted gross estate.
Under a Section 303 stock redemption, the business
redeems some stock from your estate to produce cash
to meet your estate's obligations.
How to use employee benefits to
increase income and improve retention of key employees
These concepts can help you get the most out of
your benefit dollars:
Disability salary continuation planning
A salary continuation plan can help protect you,
your key employees and your business from the financial
consequences of a disability. If the plan is funded
with disability insurance policies, premium payments
are considered tax deductible as a necessary business
expense.
Qualified pension and profit-sharing plans
Employee-sponsored retirement programs help employees
prepare for retirement and allow them to take advantage
of special tax breaks. Any contributions you make
to the plan are tax deductible.
Life Rewards
Highly compensated executives are limited in the
amounts they can save for retirement in qualified
plans. Nonqualified plans are available through
Life Rewards and allow associates to enhance their
retirement benefits.
Split-Dollar insurance
Life insurance can be provided to select executives
at a reduced cost through split-dollar insurance
plans.
Golden Executive
Bonus Arrangement(GEBA)
GEBA and other executive bonus strategies provide
life insurance to employees and give your company
a current income tax deduction.
Personal financial analysis
This service helps employees manage their money
more effectively and achieve their personal financial
goals.
Group insurance
Your business can provide a variety of programs,
and the tax deductions generated by the premiums
you pay make the cost of these benefits even lower.
Medical, disability and life insurance are the three
most sought-after programs.
The Art and Science of Business Planning can help
ensure the ongoing success of your business.
Return to
Business Solutions
Key Person Insurance:
Protect your business against the loss of one of
your most vital assets: key employees
Key people are vital to the success of your business.
A Key Person Life Insurance Plan can provide the
funds you need to keep your business running smoothly
after you've lost a key employee through death or
employee turnover.
How Key Person Life Insurance works:
The employer pays premiums for a life insurance
policy on the key employee's life. The employer
is the owner and beneficiary.
The employer can arrange an Exchange of Insurance
Agreement to reduce losses if a key employee leaves
prior to retirement. This allows the employer to
transfer coverage to a successor.
If a key employee dies, the employer receives the
policy's income tax-free death benefit* and can
apply it towards business expenses or losses caused
by the employee's death.
If you employ anyone whose sudden, unexpected absence
would significantly impact your business, consult
with your life insurance agent and financial professionals
about Key Person Life Insurance.
* Subject to the corporate alternative minimum
tax for C corporations.
Return to
Business Solutions
Life Rewards:
Select nonqualified retirement benefits for your
key executives
The benefit program your company offers is critical
to attracting and retaining top employees. Qualified
benefit programs — pension and 401(k) plans — limit
participation by highly compensated executives.
A nonqualified plan is a unique benefit designed
to attract and reward top executives. Life Rewards,
a customized nonqualified benefit program, can strengthen
the tie between your company and its top executives.
You can provide Life Rewards for your key executives
to:
- Secure the services of your most influential
executives that may impact profitability.
- Attract new managers.
- Build loyalty in today's high turnover marketplace.
- Provide a second tier of benefits to highly
compensated executives disadvantaged by qualified
plan limitations.
Three Life Rewards strategies are available:
Executive Deferral Plan
Allows the executive to defer a portion of base
salary, bonus or commissions, which lowers currently
taxable income.
Deferred Bonus Plan
Restricted solely to discretionary employer contributions
and rewards the executive subject to a vesting
schedule you select.
Executive Salary Continuation Plan
Protects against inflation to help your valued
executives achieve a comfortable retirement. Funded
entirely with company dollars.
Life Rewards offer valuable benefits to key executives:
- Lower currently taxable income during their
working years
- A survivor benefit for their family
- Tax deferred growth of retirement assets
- Parity for executives limited by qualified
plan restrictions
Who can sponsor a nonqualified Life Rewards
plan?
Any company can establish a nonqualified Life
Rewards plan. C corporations best complement
the tax advantages of a nonqualified plan; however,
nonshareholders of an S corporation also benefit.
Other entities such as a limited liability company,
limited liability partnership, sole proprietorship
or partnership may also sponsor a nonqualified
plan for select nonowner executives.
Life insurance?
Life insurance is the most commonly used informal
funding vehicle for nonqualified benefits because
of the death benefit it provides and its tax-advantaged
status. Your company will be the owner and beneficiary
of the life insurance policy, which insures
the executive participant in the plan.
Return
to Business Solutions
Golden Executive Bonus Arrangement
(GEBA):
A compensation tool designed to reward select
executives with cash value life insurance
Attracting, motivating and retaining key executives
takes a competitive compensation package that
includes more than a salary and a bonus. Until
recently, government regulations made it almost
impossible to single out and reward those employees
you value most.
The Golden Executive Bonus Arrangement (GEBA)
can be a solution for rewarding and retaining
your most valued executives. This tool gives
your company a current income tax deduction
through the purchase of cash value life insurance,
while maintaining control to encourage an executive
to stay with your company.
Other advantages of life insurance funded GEBA
include:
- You decide who participates
- You can tailor it to the needs of each
executive
- It is income tax-deductible for your company
- You can adjust the benefit to meet your
future needs
- It is easy to get started
If you're looking for an executive compensation
tool that helps you retain one or more key
executives, consider using life insurance
in a GEBA.
Return
to Business Solutions
Business estate planning:
How to preserve your life's work
You've spent a lifetime building your business.
Take a moment to make sure that your hard
work will survive the death of you or one
of your partners.
As the owner of a closely-held business,
much of your wealth is probably tied up
in the business. While returning earned
income back into the business helps finance
growth, it can cause severe liquidity problems
for your estate when you die. After paying
probate and estate taxes, your estate and
surviving family members also may encounter
liabilities that become payable upon your
death. They may also face the potential
of decreased business earnings, due to your
absence.
There are ways to overcome these liquidity
problems. Business-oriented planning tools
can help reduce estate taxes and make the
best use of the cash available. The most
common business estate-planning tools are
buy-sell agreements, Section 303 stock redemptions,
Section 6166 estate tax deferrals and the
qualified family-owned business exclusion.
Business-owned life insurance can be used
to fund each of these planning methods.
Buy-Sell Agreements
Buy-sell agreements can establish the value
of your business for estate-tax purposes
and improve your estate's liquidity by assuring
a ready market for your business upon your
death. These agreements also protect business
partners from sharing ownership with a deceased
stockholder's family.
There are two main forms of buy-sell agreements:
cross-purchase and stock redemption. In
an insurance-funded cross-purchase arrangement,
each business owner buys an insurance policy
on the other, naming themselves as beneficiary.
At the death of one of the owners, the surviving
owner receives tax-free insurance proceeds
to use in purchasing the deceased owner's
stock from his or her estate.
In an insurance-funded stock-redemption
arrangement, the corporation purchases the
stock of a deceased shareholder. Here the
business is the owner and beneficiary of
life insurance policies on each shareholder.
A partnership looking for a business continuation
plan may use a similar arrangement called
an entity purchase.
A buy-sell agreement that is funded with
life insurance will benefit:
Your Family:
- Prevents conflict with surviving owners
- Ensures that your family receives
a fair price for your business
- May set the value of your business
for estate-tax purposes
- Provides needed cash
Your Business:
- Keeps new and/or unwanted owners
out of the business
- Prevents disputes
- Ensures continuity and orderly transfer
of ownership
- May provide tax-free cash to purchase
stock
Section 303 Redemptions
Section 303 of the Internal Revenue
Code gives your estate a one-time opportunity
to remove cash or other property from
your business, at little or no tax cost,
through a partial redemption of your
stock. This can provide the liquidity
your survivors need to pay funeral costs,
estate and administrative expenses,
and state and federal death taxes.
To be eligible for a Section 303 redemption,
the stock value must exceed 35 percent
of your estate. The maximum amount that
can be paid under such a plan equals
the total amount of the federal estate
tax, state death taxes, funeral and
administrative expenses. Corporate-owned
life insurance can be used to fund the
redemption. Under this arrangement,
your business purchases an insurance
policy on your life and at your death
uses the tax-free proceeds to buy enough
stock from your estate to cover death
expenses and taxes.
Section 6166
An estate tax burden can force the
liquidation of a closely-held business.
Internal Revenue Code Section 6166 was
designed to prevent this liquidation.
If the business interest constitutes
more than 35 percent of your adjusted
gross estate, under Section 6166 the
executor may elect to pay the estate
tax attributable to the value of the
business in 10 annual installments,
beginning no later than five years after
the date of your death.
There are a number of requirements
you'd have to meet to be eligible for
the Section 6166 extension. If your
estate qualifies, life insurance offers
an economical way to pay these installments.
Qualified Family-Owned Business
Exclusion
If your business qualifies as "family
owned," you may be able to exclude part
of it from estate taxation. The amount
you can exclude is $675,000 if the death
of the estate owner occurs in 1998.
That qualifying amount gradually decreases
over time to $300,000 if the death occurs
in the year 2006 or later. Your business
qualifies as family owned if the business
comprises more than 50% of your total
estate and you pass the estate on to
a "qualified heir." A qualified heir
is generally defined as a spouse, child,
grandchild or other descendent. Your
heirs, however, should realize that
they have to hang onto the business
for at least 10 years following such
an estate transfer. If they don't, they
may have to pay the full estate taxes
that were avoided. Life insurance can
provide your heirs with the cash necessary
to pay estate taxes whether or not you
qualify for this exclusion.
Business Valuation for Estate Planning
No matter what technique you select
for your company, determining the value
of the business is a key step in the
estate planning process. Why? First,
in the case of a buy-sell agreement,
you need to know the value of the business
to determine the price and fund the
agreement. Second, because the business
is part of your estate, the valuation
is needed to estimate the estate taxes;
this helps you calculate the cash or
liquidity needed to administer the estate.
Finally, the value of the business must
be reported on the estate tax return
when the owner dies.
Return
to Business Solutions
Business continuation
planning:
Prepare for the continued success of
your business after you're gone.
Business continuation planning tools
can help you avoid the problems that
can occur when a business owner dies.
A life insurance funded business continuation
plan provides a wide variety of benefits
for your family and the business.
For your family:
- Prevents conflict with surviving
owners
- Assures a fair price for the business
- May set the value of your business
for federal estate tax purposes
- Can provide cash for your estate
For the business:
- Allows you to maintain control
of the business
- Prevents disputes
- Assures orderly transfer of
the business upon death
- Provides an income tax-free
death benefit to purchase shares
of the business
Several business continuation
plans are available:
Cross Purchase Plan
An agreement between co-owners
of a business. Surviving owners
purchase pro rata shares of the
deceased owner's stock from the
estate. To fund the purchase, each
stockholder owns, pays premium on
and is the beneficiary of an appropriate
amount of life insurance on the
other owners.
Stock Redemption/Entity Purchase
Plan
The business becomes obligated
to purchase the stock or partnership
share of a deceased shareholder
or partner. The business owns, pays
premium on and is the beneficiary
of life insurance on each shareholder
or partner.
LifeCycle Buy-Sell
Combines the benefits of the traditional
stock redemption and cross purchase
methods. Provides several benefits,
including the ability to supplement
retirement income and allocate the
premiums as desired.
Section 303 Stock Redemption
Plan
A special type of stock redemption
plan that can provide cash to the
estate of a deceased shareholder
in a tax-favored manner. Allows
a corporation to redeem a deceased
shareholder's stock without incurring
income taxable dividends. The potential
for dividend taxation upon a stock
redemption exists when a business
is passed on to surviving family
members.
One-Way Buy-Sell Agreement
Allows a single key employee or
an outsider to purchase the business
outright from the business owner's
family using the death proceeds
from a life insurance policy following
the business owner's death.
Consult your financial Advisor,attorney
and other financial professionals
for more information about creating
a Business Continuation Plan that's
right for you.
Return
to Business Solutions
Executive Bonus
Plans:
Reward key employees with life
insurance paid with deductible business
dollars
Your key employees are an important
reason that your business is profitable.
Employers often use selective, discriminatory
fringe benefits to reward those
employees whose work is more responsible
for creating profits. An Executive
Bonus Plan is one of these selective
benefits.
How an Executive Bonus Plan
works:
- The employee takes out a personal
life insurance plan and names
a beneficiary.
- The business pays the policy
premium to the insurer. It can
deduct the premium on its income
taxes as long as the total payments
to the employee are considered
reasonable compensation.
- The employee pays income taxes
on the premium
Benefits for the company and
key employees
Advantages to the company include:
- Easy administration
- Premium payments are deductible
expenses
- IRS qualification/reporting
is not required
- You select participants
- It is relatively inexpensive
- You can terminate the plan
at any time
Advantages for key employees
include:
- Business dollars pay most
of the employees' costs
- The employee's beneficiary
receives an income tax-free
death benefit
- The remaining small cost
can be decreased further using
policy dividend options
- They own and control the
policy and its cash values
- It is portable — they
can take it with them when
they leave the company
An Executive Bonus Plan can
be an excellent low-cost method
to reward employees whose
hard work helps make your
business profitable.
Return
to Business Solutions
<>Key Person
Insurance:
Protect your business against
the loss of one of your most
vital assets: key employees
Key people are vital to the
success of your business.
A Key Person Life Insurance
Plan can provide the funds
you need to keep your business
running smoothly after you've
lost a key employee through
death or employee turnover.
How Key Person Life Insurance
works:
The employer pays premiums
for a life insurance policy
on the key employee's life.
The employer is the owner
and beneficiary.
The employer can arrange
an Exchange of Insurance Agreement
to reduce losses if a key
employee leaves prior to retirement.
This allows the employer to
transfer coverage to a successor.
If a key employee dies, the
employer receives the policy's
income tax-free death benefit*
and can apply it towards business
expenses or losses caused
by the employee's death.
If you employ anyone whose
sudden, unexpected absence
would significantly impact
your business, consult with
your Financial Advisor and
other financial professionals
about Key Person Life Insurance.
* Subject to the corporate
alternative minimum tax for
C corporations.
Return
to Business Solutions
Life Rewards:
Select nonqualified retirement
benefits for your key executives
The benefit program your
company offers is critical
to attracting and retaining
top employees. Qualified benefit
programs — pension and 401(k)
plans — limit participation
by highly compensated executives.
A nonqualified plan is a unique
benefit designed to attract
and reward top executives.
Life Rewards, a customized
nonqualified benefit program,
can strengthen the tie between
your company and its top executives.
You can provide Life Rewards
for your key executives to:
- Secure the services
of your most influential
executives that may impact
profitability.
- Attract new managers.
- Build loyalty in today's
high turnover marketplace.
- Provide a second tier
of benefits to highly compensated
executives disadvantaged
by qualified plan limitations.
Three Life Rewards strategies
are available:
Executive Deferral Plan
Allows the executive to
defer a portion of base
salary, bonus or commissions,
which lowers currently taxable
income.
Deferred Bonus Plan
Restricted solely to discretionary
employer contributions and
rewards the executive subject
to a vesting schedule you
select.
Executive Salary Continuation
Plan
Protects against inflation
to help your valued executives
achieve a comfortable retirement.
Funded entirely with company
dollars.
Life Rewards offer valuable
benefits to key executives:
- Lower currently taxable
income during their working
years
- A survivor benefit
for their family
- Tax deferred growth
of retirement assets
- Parity for executives
limited by qualified plan
restrictions
Who can sponsor a
nonqualified Life Rewards
plan? Any company
can establish a nonqualified
Life Rewards plan. C corporations
best complement the tax
advantages of a nonqualified
plan; however, nonshareholders
of an S corporation also
benefit. Other entities
such as a limited liability
company, limited liability
partnership, sole proprietorship
or partnership may also
sponsor a nonqualified
plan for select nonowner
executives.
Life insurance?
|
