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Privately Financed Graded Premium Universal Life

[ 0 ] February 5, 2014

Spectrum Financial Solutions, NJ, Life InsuranceCurrently, an arbitrage opportunity presents itself to sophisticated investors whereby interest bearing loans (interest paid currently and loans retired in less than ten years) made to a trust for the benefit of family members can create guaranteed Internal Rates of Return (IRR) that far exceed those available from most portfolio assets.  As the accompanying study illustrates, if trust assets grow at a modest 6% annual rate, the underlying trust will have grown terminal value to in excess of $16,145,000 in year 27 (the joint life expectancy of the hypothetical couple used in the study).

That equates to a 12.5% tax-free IRR for the trust assets (19.3% pre-tax).

This program is not a risk-less arbitrage.  Risk may be associated only with the trust’s ability to achieve annual growth of 6% during the loan period and longevity of the investors.  To the degree that growth rates fall below 6%, loans may be extended beyond 9 years and, correspondingly, IRR’s will not be as high as illustrated.  Additionally, because the trust matures upon the death of the investors, if the trust outlasts actuarial assumptions, IRR’s may be less than indicated above (see accompanying schedules).

This program is Internal Revenue Code (IRC) compliant.  Rates of interest charged to and paid by trusts using program are based on the Applicable Federal Rate (AFR) for mid-term loans and are published monthly.  Once established, loans will bear that AFR for the term of the loan.

Perhaps a successful individual is not interested in further estate planning. This approach understands that position and posits that the Privately Financed Guaranteed UL Program, aside from offering a superior investment experience, may enable investors’ unique opportunities to expand both charitable and non-charitable goals that previously weren’t possible or were deferred.

To Summarize:

Privately Financed Graded Premium Universal Life may be a solution to issues facing many successful investors and families today.  Through the use of a minimal risk arbitrage technique, estates can be secured, charitable gifts accelerated and a variety of other planning and/or investment goals satisfied very efficiently.

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I am Rich!?

[ 0 ] September 4, 2013

Spectrum Financial Solutions, LLC I am rich?

Written by George Klahre

In a recent TIME Magazine article, it was reported that UBS had surveyed thousands of investors to come to the conclusion that if you own investible assets of $5,000,000 or more, you likely feel that you are wealthy.  Great news, right?

On closer inspection of the numbers, of those polled, fully 40% of the respondents felt that they weren’t rich with $5,000,000 of investible funds in their accounts.  And what about those with lesser balances in their accounts?

Clearly, wealth is a relative term and not only applies to financial assets, but also to other forms of wealth…health, family relationships, meaningful work or service, philanthropy, etc.  Today, let’s just focus on boring old money.

It has become staggeringly clear to this writer that most of us don’t feel nearly as financially comfortable as we would like to be.  Further, us baby boomers are approaching that time in our lives when, if we haven’t done so already, we start thinking about retirement years, life expectancies well into our 80’s and how are we going to afford us for the next 25-30 years…or longer.

And then there’s that thing called a legacy….

Don’t despair.  Planning now can alleviate fears and concerns.  I have worked with clients and their advisors over the years and the opportunities that the legal, investment and financial communities can access may work wonders in addressing the questions of the future.  Maybe time spent with your advisors now can enhance your “wealth”…both financial and otherwise.

 I would love to chat with you if you or your client thinks it makes sense.

George Klahre

Spectrum Financial Solutions, LLC

Spectrum Financial Solutions, LLC located in New Jersey and Spectrum Financial Solutions, LLC located in FL have been assisting individuals and businesses with their financial challenges for over 30 years.  With an emphasis on partnering with the right professional, we offer technical help and  specializations to meet your every need. Retirement Planning in FL, Tax Planning in NJ and Estate Planning in NJ are our successful hallmarks.

Need to know about Privately Financed Universal Life Insurance in FL? Call us today. Family Legacy Unitrust Edge in NJ has been created to help families establish lifetime legacies in a unique manner that simultaneously addresses social and family needs. We’d like to make sure you know more. Applicable Federal Rates in FL affect many of your planning tools.


George Klahre

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