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/// Posted by Aviva Sapers & Ken Vacovec

This blog is co-authored by Aviva Sapers, CEO of Sapers & Wallack,  and Kenneth J. Vacovec, Founding Partner of Vacovec, Mayotte & Singer.

For many Green Card holders or US citizens who own property or assets abroad, the eventual estate taxes that will be due on those holdings can be significant and even prohibitive if not planned for accordingly. One, often overlooked, technique for addressing this problem is to use a life insurance policy to cover the taxes on those assets when they are added to the estate held in the US.

Life insurance usually costs about 1% of your estate to provide for the taxes due on 100% of the estate. If set up properly in an irrevocable life insurance trust, the proceeds can be kept out of your estate for income and estate tax purposes. In addition, depending on how much insurance you need, most of the premiums can be paid using the annual gift tax exclusion, which is currently set at $15k per person. A survivorship or second-to-die life insurance policy pays out at the second death within a covered couple, which will line up with when estate taxes are due.

For foreign nationals, life insurance can also provide for a great tax-sheltered investment in US dollars. Assuming that you spend some time here and have bank accounts in the US, foreign nationals can purchase a life insurance policy that builds cash value and earns returns similar to bonds or investments in the stock market within the policy. Some foreign nationals may want to diversify their currency investments by acquiring assets in US dollars, and life insurance policies sold by US companies can offer a tax-advantaged way to do this.

Life insurance cash value growth is not taxed unless the policy is surrendered. This means that one can pull out what was paid in policy premiums without any tax on those withdrawals. Cash amounts above premium costs can be ‘borrowed out,’ typically at zero net cost borrowing after the first 10 policy years—as long as there is still enough left in the policy to keep it going until death. When an insurance policy is utilized as an investment vehicle, we can typically solve for max funding and minimal death benefit to receive the greatest investment growth for the lowest insurance cost. This is just the opposite of how we would solve for insurance premiums being purchased for a death benefit.

Either way, we would recommend life insurance be part of the conversation for wealth accumulation or liquidity needs for those with assets abroad or foreigners who want to diversify investments in the US.

Please get in touch if you would like further information.

Securities offered through Lion Street Financial, LLC (LSF), member FINRA/SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA). LSF and LSA are not affiliated with Sapers & Wallack.

Variable life insurance is sold by prospectus. Please consider the investment objectives, risks, charges, expenses, and your need for death-benefit coverage carefully before investing. The prospectus, which contains this and other information about the variable life policy and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable life policy are not guaranteed. Variable life sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the policy is surrendered. Contract surrender charges may also apply.

How to Utilize Technology Tools to Boost Financial Wellness

/// Posted by Holly Knight

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Stress is likely the largest contributor of health issues and loss of productivity at the workplace in America—and an estimated 84% of stress is derived from financial problems. That equates to huge financial ramifications for businesses of all sizes. A recently conducted Salary Finance survey found that American businesses are losing as much as 500-billion-dollars a year due to personal employee financial stress. That isn’t just alarming, it’s a national crisis that requires bold, proactive change to address it. Luckily, some of the tools to shift how our employees confront and work through personal financial stress already exist—all that’s missing is the focus and directive to know how to use them.

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Holly Knight, Director of Retirement Outcomes at Sapers & Wallack answers  questions about our June blog, How to Utilize Technology Tools to Boost Financial Wellness

 

With the benefit of the past year in hindsight, it’s safe to say that most everyone has learned some lessons from the pandemic about planning for the unexpected. Both businesses and individual financial outlooks have been dramatically affected by the months of uncertainty and shutdown, with short-term risk mitigation and long-term planning for the next “black swan” event top of mind like never before. 

The importance of risk preparation and having emergency funds on hand have come into stark focus in my retirement practice. I’ve helped many clients wrestle with the sudden losses and constraints placed on nest eggs and retirement accounts by the months of lost income and financial upheaval. As a general rule, the older and more established you are financially, the bigger hit you have likely taken from the pandemic.

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Scott Tuxbury, Vice President and Leader for the Retirement and Wealth Management Practices at Sapers & Wallack answers  questions about our May blog, Contributing to an emergency Savings Account Through Payroll Deduction.

 

Why Wealth Management at Sapers & Wallack?

/// Posted by Andrew MacDougall

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As one of the newest members of the Sapers & Wallack team, I thought this a good way to introduce myself and explain why I am so excited to join this company as the new Director of Wealth Management. I have been in the financial services field for over fifteen years now ranging from getting MBA at Northeastern University with a concentration in investments, working at the largest Corporate & Investment Bank in JPMorgan to most recently working as a Managing Director of Wealth Management at an RIA firm here in Boston. What struck me is the varied approach to client service across the industry.

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Podcast Q&A: Why Wealth Management at Sapers & Wallack?

/// Posted by Andrew MacDougall

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Andrew MacDougall answers questions about our April blog, Why Wealth Management at Sapers & Wallack?

How to Build Your Network

/// Posted by Evan Macedo

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For many businesses, and certainly throughout the insurance and financial services fields, the process of meeting new people and expanding our professional networks is key to success. Though this past year has put a serious damper on the traditional ability to shake hands and build new relationships, avenues still exist for making connections and many of the principles for best practice in networking remain the same.

As someone who is still in the relatively early stages of my career, I take an active role in network building and relationship maintenance, regarding it as a fundamental aspect of my job. While I don’t claim to be a guru on the subject, I can relate some tips and techniques that have worked for me as I proactively try to expand my reach and connection base before, during, and after the pandemic.

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Podcast Q&A: How to Build Your Network

/// Posted by Evan Macedo

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Evan Macedo, Vice President Finance & Operations at Sapers & Wallack, and Jeffrey Davis, Chairman and CEO at Mage LLC, answer questions about our March blog, How to Build Your Network.

 

Estate Planning To-Do-List – No Matter What Stage of Life You Are At

/// Posted by Kristen Maalouf

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I have worked in the financial services industry with life insurance products and estate planning for over 25 years, and in that time, I have had the opportunity to help many families file policy claims as they settle the estates of loved ones. I have seen first-hand the importance of the deceased having a financial plan in place for their families, just as I have helped others navigate the difficulties of not having a secure financial strategy to build on. 

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