BY GUY CARSON
We wrote recently about the Biden administration increasing taxes on capital gains and dividends (see here). Taxation is something that none of us can avoid, at least in a legal way but tax planning can be a very useful tool if done correctly. To this end, Private Placement Life Insurance (PPLI) is shaping as a very powerful tool.
PPLI is a simple concept, it is an investment portfolio wrapped inside a life insurance policy. However, within this simple framework there are many moving parts that people need to ensure they get right. The timeframe, the death benefit and the investment portfolio will all impact the future value of the policy. Importantly the portfolio needs to maintain the premiums. Getting any part of the policy wrong can have a major impact.
With regards to the timeframe, these policies are typically long dated. Hence the investment portfolio needs to take a long-term view and the policy needs to be housed within a long-term vehicle. Hence, an asset protection trust becomes the ideal structure for it.
With all these considerations, it is important to choose the right partner. With that in mind, we have attached an article (PPLI – BFI)from our friends at BFI Consulting. Southpac has worked successfully with the BFI Group for a number of years, if any of our clients do wish to explore their PPLI solutions please contact Guy Carson at firstname.lastname@example.org