Estate Equalization

Transcript:

Estate Equalization

[video: Text appears that reads "Mutual of Omaha" followed by "Cash Value Life Insurance from United of Omaha Life Insurance Company".]

[video: An illustration of a building with the text "Family Business" atop appears with an arrow next to it that points to a silhouette of a family of three.]

One of the challenges with a family business is figuring out how to pass all that you’ve worked to create on to the next generation – especially when some children actively participate in the family business and others don’t.

[video: An illustration of a document that reads "Life Insurance" appears. The screen clears and now the illustration of the family business building has an arrow that points to two of the family member silhouettes. Below this the life insurance document then points to the remaining family member silhouette.]

One solution that can help keep the family business in the family – and protect family harmony – is by using a life insurance policy. Here’s how it works: You can leave your business to the participating children. Then, to equalize the inheritance for children not participating in the business, use the life insurance proceeds to provide a way to off-set the value of the share of business that would be given to the non-participating family members.

[video: An illustration of a scale appears weighing heavily one direction, and then balancing out. As this disappears, text appears on the screen that reads "Advantages of Life Insurance" with bullets denoting "family harmony", "business continuation", "cash value access" and "income tax-free death benefit".]

Although the inheritances do not necessarily need to be the same, life insurance can help ensure they are more equitable. Using life insurance to plan ahead has multiple advantages: First, as mentioned, it can help keep the peace within your family, by keeping the estate distribution as equitable as possible. Second, creating a properly structured plan helps arrange for children who are active in the business to be able to continue running the business without interruption and without having to liquidate assets. Third, depending on the type of life insurance you choose, your policy may have a cash value. This cash value grows tax-deferred and you have access to it through tax-free loans and withdrawals. Finally, as long as you properly structure your policy, your beneficiaries will receive a death benefit without paying income or estate taxes.

[video: The family business appears again with a moving truck next to it.]

By planning now, you can help ensure that all of your children benefit from the legacy you intend to leave them – and allow your family business to continue.

[video: A document appears that reads "Cash Value".]

Cash Value Life Insurance, with its emphasis on lifelong protection with a potential for cash value growth, can be an especially attractive choice for an estate equalization plan.

[video: The Mutual of Omaha logo appears and then fades away.]

This video does not provide all the terms and conditions of the policy. Any decision to purchase an Indexed Universal Life Insurance (IUL) policy should be made only after reviewing the policy and additional information about the policy. Under some circumstances, certain amounts received from an IUL policy are subject to taxes. For example:

• If your contributions to the policy exceed certain limits, your policy may become a “modified endowment contract” under federal tax law. If so, any loans or withdrawals would be taxed as ordinary income to the extent of any gain in the policy and, if the policyowner is under age 59-1/2, would also be subject to a 10% penalty tax
• If your policy terminates following a grace period or if you surrender your policy, the amount of any outstanding loans would be taxed as ordinary income to the extent of any gain in the policy

Life insurance is underwritten by United of Omaha Life Insurance Company, 3300 Mutual of Omaha Plaza, Omaha, NE 68175. United of Omaha Life Insurance Company is licensed nationwide except in New York. All guarantees subject to the financial strengths and claims-paying ability of the issuing insurance company. This is a solicitation for insurance and a licensed agent/producer will contact you. Coverage may vary by state. This information should not be construed as tax or legal advice. Consult with your tax or legal professional for details and guidelines specific to your situation.

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