Second Quarter 2010

The uncertainty about the future of the federal estate tax, state estate or inheritance taxes and other estate-settlement costs indicate that estate and financial plans should be flexible for changing needs. The durable power of attorney is an inexpensive device that permits a person to designate a family member or professional adviser to make critical financial and personal decisions and take action to preserve the estate when incapacity occurs.

An estate plan that is never updated works about as well as a car that is never serviced. They're both in great condition when they're new, but the wear and tear of the intervening years can take an enormous toll. Because even the most well-conceived plan cannot predict every contingency, a careful review of an existing estate plan is critical to making sure that it will continue to meet evolving needs.

December 2009 Capital Markets Review

After a long process of debate, procedure and Congressional politics, we have Health Care reform. The changes are actually in two pieces of legislation. The Patient Protection and Affordable Care Act was passed by the Senate and the House under normal parliamentary procedures, and the Health Care and Education Reconciliation Act of 2010 was passed under the reconciliation process in the Senate by a simple majority vote and approved by the House. President Obama signed both bills into law last month. The legislation contains sweeping changes to the health care system in the United States, with many tax and other revenue-raising provisions designed to offset portions of its cost.

First Quarter 2010

The purpose of this bulletin is to look at the relatively low historical failure rates for life insurers, examine the most common risk factors that contribute to life insurer impairments, and discuss safeguards that have evolved over the last 20 years to minimize the impact of those risk factors. The bulletin also reiterates the effectiveness of policyholder protections, even when a carrier experiences financial challenges.

Most people wonder what they should do with their tax records. These items include old returns; substantiating information such as receipts, canceled checks, and diaries; and financial statements regarding stocks, bonds, and real estate. The current law concerning estates has provided a rather unique and troubling situation with a temporary one-year repeal of the federal estate and generation-skipping taxes and a one-year repeal of the so-called basis step-up rules that otherwise establish the income-tax basis for assets passing to heirs. For 2010, the assets would pass to heirs under what is technically referred to as the modified carryover basis rules. We feel that this law may be changed retroactively, but barring that development, it would be imperative to understand the impact of this rule on record keeping and compliance. Here are some guidelines for determining what to keep and for how long.

People, who die without a valid will, die intestate. In this event, the state in which they resided effectively provides a will through the state's intestacy law. This means that the state dictates who will receive the estate owner's property and in what proportion.

While state intestacy laws do attempt to provide for a "fair" distribution of property, the state's "one-size-fits-all" simply cannot reflect the specific wishes of the estate owner in regard to either property distribution or the unique needs of the estate owner's heirs.

Congress’s failure to adopt estate tax legislation in 2009 and the possibility that changes will not be adopted during 2010, radically change the estate planning considerations of many clients. For example, Congress has indicated that in 2010 about 6,000 decedents will benefit from the elimination of estate taxes, but over 70,000 heirs will pay higher income taxes because of the change in the income tax basis rules for assets received from decedents.

The Health Care reform has lost momentum and may not come to fruition. It contained surprisingly little about the potentially devastating costs of long-term care needs. There is a bill (The CLASS Act--Community Living Assistance Services and Support) that was introduced by the late Senator Kennedy that would address some the concerns associated with long-term care, but its current prospects are uncertain.

December 2009 Capital Markets Review

The economy and action/inaction of Congress have created more than the usual upheaval with respect to tax planning moving forward into 2010. The federal estate and generation-skipping transfer (GST) taxes lapsed (for one year) at the end of 2009. This has generated some controversial discussion in the media and Congress will have to address this issue sometime this year.

Fourth Quarter 2009

You should monitor the impact of these increases on your estate plan. The pressure to raise revenue is going to be intense over the next decade.

Permanent life insurance is not just about death benefits. It’s an essential tool in estate, business succession, and financial planning, with myriad and diverse uses.

You may have heard about the opportunity for all taxpayers to make a Roth IRA conversion beginning in 2010. This type of tax-planning opportunity only comes around once or twice a decade and should get serious consideration.

September 2009 Capital Markets Review

Third Quarter 2009

Diversification in an Uncertain Age

June 2009 Capital Markets Review

Taking the Long-Term View

Who’s Watching Your Back? An Assessment of Life Insurance Policyholder Protections in the Wake of the Financial Downturn.

Choosing Life Insurance Products in Today’s Volatile Economic Environment. From product selection to product performance, there are many factors to consider when buying life insurance. The ongoing volatility in the financial markets can create additional challenges. What should clients be aware of when considering various product types? Are there ways to mitigate the uncertainty of policy performance in this environment?

Q&A: Carrier Solvency and the Impact On Policyholders. As insurance carriers continue to face challenges due to the recent economic turmoil, solvency is on the minds of many clients and advisors. Addressing some basic questions about solvency, and the implications for policyholders, supports efforts to restore confidence in the life insurance industry.