Bridging Loans

Burial Insurance

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Final Expense

Hedging Interest Rate Risk


Investments - Buffett

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Long Term Loans -Debentures

Life Insuranc Estate Planning -Trusts

Life insurance for estate planning

Loans with Profit Share

Mezzanine Loans

Options and warrants

Offset Mortgages

Property Development

Stock Market Launch - Property

Stock Market Investing - Buffett

Swaps to reduce loan costs

Syndicated Loans

If you die your dependants might have to pay inheritance tax on any life insurance payout you have arranged for them. There are a few ways to prevent or diminish the taxes.

Life insurance can provide protection if a family member dies such as paying the mortgage or providing a lump sum of cash for a family member.

However one decision that needs to be made is whether an insurance payout to the beneficiaries should come to them directly or should come to them through an aalternative route such as a trust. By putting the insurance into a trust you can reduce your inheritance tax by thousands of dollars.

What is a trust and how is it used?

A trust is an arrangement, which can be written down in a formal "deed of trust" that gives benefactor control over how the beneficiaries receive the assets and helps the beneficiaries by reducing the amount they have to pay in tax.

Tax Savings

If you have substantial wealth when you die setting up your life insurance in trust means that your beneficiaries will not have to pay tax on the insurance payout.

To give an example, ifyour assets are worth more than $325,000 and a life insurance policy has a payout of $100,000, this amount could be reduced to $60,000 if the insurance policy is not placed in trust. $325,000 is the current inheritance tax threshold. If one has assets between $225,000
and $325,000 your life insurance will still be taxed but at a lower rate.

Other benefits

Since the payout from the trust does not form part of ones estate, there is often less legal procedures that have to be undertaken for the money to pass to the beneficiaries so as a consequence the beneficiaries often receive the money quicker than if it is not placed in trust. If the life insurance is not placed in trust it forms part of the estate which means the proceeds of the life insurance policy along with the proceeds of other assets are used to pay the inheritance tax first before the beneficiaries can be paid, but not if the insurance is placed in trust.

Other considerations

The costs of putting the life insurance policy in trust is often zero, and the insurance companies often put the policy into trust for free  when one takes out the policy.