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The Anti-Annuity Wealth Transfer Strategy

FACTS

There are three things that can happen to your money:

  1. You can spend it.
  2. You can use the Anti-Annuity which is a Tax-Free Wealth Transfer Strategy to get it to your spouse and/or heirs.
  3. You can let the government take it and spend it

ANNUITY AND IRA TAX TRAP

Taxes to consider:

  1. Federal income tax
  2. City income tax
  3. State income tax
  4. Federal inheritance tax
  5. As of January 1st, 2013 - 40% of your estate over 5 million dollars goes to Uncle Sam
  6. State inheritance tax

Estates Under 5 Million Dollars

IRA's

  1. Upon death can go to spouse, there's no tax consequences for him/her to continue.
  2. IRA's can be stretched or inherited by children.
  3. Income taxes are due at time of distribution.

Annuities

  1. Upon death can go to spouse, there's no tax consequences for him/her to continue.
  2. After death or death of spouse the annuity must be cashed in.
  3. All profits subject to federal, state & city income tax at beneficiary rate.

Note: Trust Beneficiary Is The Highest Tax Rate.

Estates Over 5 Million Dollars:

IRA's

All monies over 5 million subject to:

  1. Federal tax of 40% of your dollars.
  2. Federal income tax profit.
  3. State income tax on profit.
  4. City income tax on profit.

Result: Eventually 76% or more of all dollars go to the government.

Annuities

All monies over 5 million subject to:

  1. Federal tax of 40% of your dollars.
  2. Federal income tax profit.
  3. State income tax on profit.
  4. City income tax on profit.

Result: A $300,000 annuity can be worth $72,000 or less to your heirs.

THE SOLUTION

You look forward to enjoying your financial success during your lifetime, but you also want to provide for those who are important to you after you're gone.

You should consider a financial vehicle that can help meet the following goals:

  1. Reducing taxes on your estate.
  2. Providing liquidity to pay taxes, debts and estate settlement costs.
  3. Ensuring financial security during your lifetime and providing for your family after death.
  4. Avoid assets going to unintended beneficiaries, such as Uncle Sam.

The Anti-Annuity: An effective solution that can provide you these amazing features:

  1. Tax-Free Growth
  2. Provide Protection Against Negative Market Returns.
  3. Good For IRA Money/Qualified Financial Products.
  4. Liquid Money
  5. Policy Proceeds Are Received Income Tax Free, Estate Tax Free And Are Paid Immediately.

The ANTI-ANNUITY will also give you benefits for:

  1. Death Benefit Protection
  2. Cash Value Accumulation
  3. Long Term Care
  4. Serious or Critical Illness
  5. Assisted Living
  6. Family Protection

EXAMPLES

Example 1:

John S. is 75. He owns an annuity that he and his spouse are never going to use. John lives in a state with no income tax and he does not have an estate tax issue.

They put $150,000 into the annuity which is now grown to $300,000. Upon both their deaths the heirs will owe about $52,500 in taxes netting them $247,500.

Upon Wealth Transfer, the new net to the heirs is $370,201 tax free. A difference of $122,701!

Example 2:

Mildred is a 78 year old widow. She owns an annuity that she

Purchased for $300,000 now worth $500,000. She has an estate over 5 million dollars and lives in a high tax state. Under the new laws of January 1, 2013 the net to her heirs could be less than $155,000.

That's right, $500,000 could be less than $155,000 net after taxes. Yet using Wealth Transfer the heirs net is $789,097 TAX FREE!

© Phillip Wasserman 2014

This article does not give individual tax advice and its purpose is to educate. None of the examples in the article should be used for your personal planning.