Transferring In-Kind Assets into a Non-Grantor Trust

Avoiding Investor Control Issues

Part 2

Read Part 1: Non-Grantor Trust as Owner of PPLI Policy

Transferring In-Kind Assets into a Non-Grantor Trust

Transferring In-Kind Assets into a Non-Grantor Trust Before Purchasing a PPLI Policy

A non-grantor trust can be an effective owner of a Private Placement Life Insurance (PPLI) policy, as discussed in our previous blog post. To avoid potential investor control issues, it is important to first transfer in-kind assets into the non-grantor trust before the trust purchases the PPLI policy.

Summary

Why Transfer In-Kind?

  1. Investor Control Issues: When a non-grantor trust purchases a PPLI policy, it must avoid any appearance of investor control. Transferring assets in-kind (without selling them first) helps maintain this separation.
  2. Avoiding Capital Gains Tax: By transferring appreciated assets directly into the trust, you avoid triggering capital gains tax. The step-up in basis provision ensures that the trust’s beneficiaries inherit the assets at their current market value for tax purposes.

Key Considerations:

  1. Timing: Transfer assets well in advance of purchasing the PPLI policy to prevent inflating their value and maintain compliance with tax regulations.
  2. Asset Types: Consider various assets—stocks, real estate, or other investments—for in-kind transfer. Each has its implications, so consult with a financial advisor or attorney.
  3. Documentation: Properly document the transfer to demonstrate that the assets are no longer part of the grantor’s estate.

By transferring assets into the non-grantor trust prior to the PPLI policy purchase, the trust becomes the legal owner of the assets. This helps establish that the trust, rather than the individual grantor, is directing the investment decisions within the PPLI policy.

This structure can provide important tax and asset protection benefits compared to an individual owning the PPLI policy directly.

The key is to ensure the non-grantor trust is properly established and funded with the desired assets before the PPLI policy is acquired. This helps demonstrate that the trust, not the grantor, is in control of the investment decisions within the PPLI policy. Careful planning is required to execute this strategy effectively.

What are the benefits of transferring in-kind assets into a trust before purchasing a PPLI policy?

Transferring in-kind assets into a non-grantor trust before purchasing a Private Placement Life Insurance (PPLI) policy can provide several key benefits:

1. Establishing the trust as the legal owner of the assets helps demonstrate that the trust, rather than the individual grantor, is directing the investment decisions within the PPLI policy. This can help avoid potential investor control issues.

2. By having the trust own the assets first, it becomes clear that the trust is in control of the investments, not the grantor. This helps maintain the tax and asset protection benefits of the PPLI structure compared to an individual owning the policy directly.

3. Careful planning is required to execute this strategy effectively. The key is ensuring the non-grantor trust is properly established and funded with the desired assets before the PPLI policy is acquired.

4. Placing PPLI within certain trust structures enables the death benefit to pass to the beneficiaries free of wealth transfer taxes. This allows investors to grow their assets income tax-free and pass them on estate tax-free.

5. PPLI policies can be placed in a trust to facilitate the transfer of wealth to beneficiaries. The death benefit from the PPLI policy, when paid out to the trust upon the policyholder’s death, can be used to provide liquidity for estate taxes, debts, or other expenses, or it can be distributed according to the terms of the trust.

In summary, transferring assets into a non-grantor trust before purchasing a PPLI policy helps establish the trust as the legal owner of the assets and the party directing the investments. This can provide important tax and asset protection benefits compared to an individual owning the policy directly.

Remember, strategic planning is essential to maximize the benefits of a non-grantor trust. Seek professional advice to navigate this complex landscape effectively. Contact EWP Financial today! your best source for PPLI and EWP.

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

 

Meet the Experts

EwP Financial

Introducing Our Expanded Worldwide Planning and EWP Financial Team

At Expanded Worldwide Planning (EWP) and EWP Financial, we are proud to have assembled a team of highly skilled financial professionals who are experts in Private Placement Life Insurance (PPLI) and other sophisticated wealth management strategies. Our team is dedicated to providing our clients with innovative solutions to meet their unique financial needs.

Michael Malloy

Michael Mlloy-CLU-TEP

Founder

Michael Malloy, CLU, TEP, RFC – Founder and Chief Advisor

Michael Malloy is the founder and chief advisor of EWP Financial and partner companies. He is a Chartered Life Underwriter (CLU), a Trust and Estate Practitioner (TEP), and a Registered Financial Consultant (RFC) with over 30 years of experience in the insurance and financial services industry. Michael specializes in designing and implementing PPLI and other tax-efficient structures for high-net-worth individuals and families around the world.

Juan Carlos Gomez – Website and Video Optimization Expert

Juan CArlos Gomez - Web and Video Creator   Juan Carlos is a skilled website and video optimization expert who is responsible for enhancing the online presence and user experience of EWP. With his expertise in digital marketing and content creation, Juan Carlos is helping us better communicate our services and solutions to our clients.

Our Team of Financial Advisors

In addition to Michael and Juan Carlos, our team includes a group of highly qualified financial advisors who are experts in PPLI, Expanded Worldwide Planning (EWP), and other advanced financial strategies. These advisors work closely with our clients’ tax and legal professionals to develop customized solutions that address their unique needs and goals.

Together, our team is committed to providing our clients with the highest level of service and expertise. We look forward to working with you to help you achieve your financial objectives.

Regional Representatives

I Huai Hao 郝宜惠

China, Portugal, Brazil

 Zhi Zhu Jones /朱志

China, Far East

Marcia Frew
United States, Canada, Australia, New Zealand
.
Aniuta Lasken Golob
Russia, Ukraine, CIS countries
.
Pilar Earl
South America, Central America, Mexico
.
Ingrid Claes
Europe
.
Georgios Georgakopoulos
Middle East, Greece, Africa
Team Work - EWP Financial
Please CONTACT US for any questions you may have.
~ The EWP Team

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

 

How to use PPLI and EWP for your best financial benefit

How to use Private Placement Life Insurance

&

Expanded Worldwide Planning for your best financial benefit

How to use PPLI and EWP for your best financial benefit.

Private Placement Life Insurance (PPLI) is a sophisticated life insurance product that offers death benefit protection while also providing access to a variety of registered and non-registered investments that are accessible solely within the life insurance policy structure . PPLI is a form of “permanent” variable universal life (or VUL) insurance providing both death benefit protection and a cash value component that accumulates investment growth within the policy. Premiums paid in excess of the cost for the death benefit coverage are credited to, and grow as part of, the policy’s cash value. VUL policies enhance this investment feature by permitting policy owners to direct the allocation of the policy’s cash value among various investment options managed by third-party advisers .

Expanded Worldwide Planning (EWP) is a sophisticated planning tool that uses PPLI as its foundation. EWP is a planning structure that uses the benefits of PPLI to structure assets for wealthy families. Once assets are placed inside the PPLI asset structure, these assets take on the six principles of expanded worldwide planning: privacy, asset protection, succession planning, tax shield, compliance simplification and trust substitute .

EWP Financial, founded by Michael Malloy, is a leading provider of PPLI and EWP services. The company has a team of experienced professionals who can help you understand the complexities of these planning tools and how they can be used to achieve your specific financial goals.

PPLI and EWP can be used to achieve a variety of financial goals, including:

  1. Wealth preservation: PPLI can be used to preserve wealth across multiple jurisdictions and also has a multitude of wealth planning benefits .
  2. Tax planning: PPLI can be used to minimize tax liabilities and maximize tax efficiency .
  3. Asset protection: PPLI can be used to protect assets from creditors and other legal claims .
  4. Succession planning: PPLI can be used to ensure that assets are passed down to future generations in a tax-efficient manner .
  5. Compliance simplification: PPLI can be used to simplify compliance with complex tax and regulatory requirements .
  6. Trust substitute: PPLI can be used as an alternative to traditional trust structures .

To use PPLI and EWP for your best financial benefit, it is important to work with a qualified financial advisor who can help you understand the complexities of these planning tools and how they can be used to achieve your specific financial goals.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

 

Financial Plans for 2024?

Financial Plans for 2024 with the Help of PPLI and EWP

Financial Plans for 2024 with the help of PPLI and EWP

In this blog post, we will discuss financial plans for 2024 and how Expanded Worldwide Planning (EWP) and Private Placement Life Insurance (PPLI) can help you navigate through financial crises and global recessions. These videos showcase the benefits of PPLI & EWP.

How can PPLI & EWP help you on a financial crisis? This video explains how PPLI & EWP can be utilized as financial tools to potentially provide protection and mitigate risks during a financial crisis. 

How can PPLI & EWP protect you from a global recession? This video highlights how PPLI & EWP can be used to potentially provide protection and mitigate risks during a global recession, especially for high-net-worth individuals. 

EWP for Tomorrow’s Global Leaders
This video showcases how EWP can help tomorrow’s global leaders improve the world. 

We hope that this blog post will provide you with valuable insights on financial planning and the benefits of PPLI & EWP. If you have any questions or would like to learn more about our services, please feel free to contact us. Thank you for choosing EWP Financial!

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC

 

 

 

 

 

 

 

Maximizing Tax Efficiency with EWP and PPLI

 Unlocking International Wealth Planning

EWP and PPLI working together

In today’s era of tax transparency, we delve into the world of international tax planning and present a solution that can help families reduce their tax burdens while ensuring compliance with tax authorities. Welcome to the realm of Expanded Worldwide Planning (EWP) and the power of Private Placement Life Insurance (PPLI).

Gone are the days when tax codes mirrored ancient civilizations like Hatshepsut’s temple in Egypt. In our modern global economy, governments face the challenge of taxing individuals and businesses that extend beyond their borders. At EWP Financial, we are staunch advocates of EWP, which offers families a simplified framework through carefully structured PPLI policies.

Our approach encompasses innovative strategies, and one such element lies in the realm of in-kind premium payments. By partnering with insurance companies located in jurisdictions that accept non-cash contributions, we empower families to use their assets and businesses as premium payments, rather than relying solely on cash. This flexibility opens doors to significant tax savings without compromising compliance.

PPLI is a customized solution designed exclusively for families seeking tax advantages. Under this globally recognized and tax-favored umbrella, various asset classes can flourish. While PPLI is popular in the United States for tax optimization in securities, such as high-tax hedge funds, our expertise extends beyond borders to cater to the diverse international holdings of families. We construct adaptable structures that accommodate multiple asset classes, including companies, valuables, and collectibles, going beyond the realm of traditional securities.

Here are some fascinating facts to ponder, gleaned from sources like Wikipedia’s articles on “Tax” and “Taxation in the United States”:

– Ancient Egypt, during the First Dynasty around 3000–2800 BC, witnessed the first known system of taxation. The Pharaoh would tour the kingdom every two years, collecting tithes and maintaining records on limestone flakes and papyrus.

– Pre-French Revolution, effective tax rates in Britain exceeded those in France, mainly targeting international trade. In France, taxes were lower but weighed heavily on landowners, individuals, and internal trade, resulting in heightened resentment.

– Historically, taxes on the poor supported the nobility, whereas modern social-security systems aim to support the poor, disabled, or retired by levying taxes on those still actively working.

– The first federal income tax in the United States was introduced as part of the Revenue Act of 1861, although it lapsed after the American Civil War. In 1913, the Sixteenth Amendment to the United States Constitution allowed the federal government to levy income taxes on both property and labor.

As the adage goes, “There is no certainty like death and taxes.”

While we can’t assist with the former, EWP Financial is here to guide international families in harnessing the potential of PPLI. Discover how we can help you achieve tax compliance, enjoy tax deferral, and secure a tax-free death benefit—all while optimizing your wealth for generations to come.

Contact us today to embark on a journey towards maximizing your tax efficiency through EWP and PPLI.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP
Michael Malloy CLU TEP RFC