Questions for an insurance and estate liquidity review
Insurance and estate liquidity reviews address cash needs, policy records, beneficiary designations and buy-sell agreements for business owners and trustees. Estate planning practitioners describe review topics spanning the insurance contract, business purchase arrangements, policy ownership and the administration of insurance held in an irrevocable life insurance trust.
Estate cash needs and business purchase records
Practitioners point to coordination among a buy-sell agreement, the insurance policy funding the agreement, the valuation method, transaction timing and ownership structure.
Policy administration records
Trust and estate practitioners describe monitoring and managing trust-held life insurance policies as fiduciary duties of insurance trust fiduciaries.
Trust administration and ownership records
Practitioners regard evaluation of available policy options as part of an irrevocable life insurance trust trustee's fiduciary duties to trust beneficiaries.
Common questions
What banking relationships affect credit availability?
Practitioners note that lender appetite and the next generation's relationship with banks are factors affecting credit availability, contributing to uncertainty about bank financing for owners whose liquidity arrangements involve borrowing from banks.
What policy loan effects extend beyond interest?
Practitioners describe policy loans as decreasing the death benefit and potentially causing taxable income if the policy lapses or is surrendered with gain while a loan remains associated with the policy.