The Leveraged Legacy Strategy™
The Leveraged Legacy StrategyTM is designed to acquire significant life insurance with lower out of pocket costs than traditional methods. Most of the time, the life insurance policy is owned inside of an Irrevocable Life Insurance Trust or Dynasty Trust for the purpose of holding the death benefit proceeds outside of a family’s taxable estate.
Estate and Legacy Plans may be designed to address multiple objectives, such as:
- Fund estate taxes
- Provide liquidity for the estate or business
- Equalize the estate among family members who have no desire to take an active role in a family business.
- Create a significant contribution to charity or religious organization
- Create significant assets outside of the taxable estate
- Protect against lawsuits and divorce
- Preserve and control family wealth for multiple generations
A unique value proposition is created when all or a portion of a life insurance policy is financed using Tennyson Capital Partners’ The Leveraged Legacy Strategy:
- We work with clients and their advisors to acquire large life insurance policies which may be owned outside of the taxable estate
- Out of pocket costs may be significantly less than a traditionally purchased life insurance policy. This may allow clients to lower their gifts to a trust to fund the policy, and potentially reduce or eliminate gift taxes.
- Financing may help to preserve lifetime exemptions
- Free up cash flow for other purpose
- Life insurance death benefits are paid income tax free to the trust
- The internal rate of return of the death benefit is typically much more attractive using financing
- Clients can be confident that their legacy is secure and use their other assets more freely
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified advisor.