Family Offices Incorporate Life Settlements as a Sophisticated Planning Strategy

Recent financial market data indicates that the number of households worth more than $25 million increased by 50% over the past five years.

Along with greater wealth comes greater financial complexity – and a greater need for wealthy families to seek professional advice on a wide range of financial issues, including business succession planning, tax and estate planning, and advanced life insurance planning.

Most financial professionals with ultra high-net-worth clients recognize that advanced insurance planning – especially decisions regarding the disposition of obsolete life insurance policies – requires a specialized field of expertise.

That’s why most wealth managers and family offices are outsourcing complex life settlement transactions to highly competent experts such as the experienced brokers at Asset Life Settlements.

Below are several planning scenarios that help illustrate how family offices and financial professionals can incorporate life settlements into their platform of deliverables.

Liquidity for Underperforming TOLI Policies

Trust-owned life insurance is often central to many clients’ estate plans. But if the TOLI policy becomes obsolete or the annual premium for an underperforming policy begins to drain an estate's liquidity, selling the policy in the secondary market can help restore financial stability to the estate and minimize administrative chaos.

Family Offices Can Monetize Obsolete COLI Policies

Most ultra-wealthy clients have their net worth inside a business or multiple businesses that were set up to sustain the family’s wealth for future generations. As key man executives inside these family businesses retire and their corporate-owned life insurance is no longer relevant, a life settlement could be the most sensible option to free up funds for new business ventures.

While wealth managers at family offices have a broad range of professional expertise, they recognize that selling a large policy for the highest market value is a specialized field that requires working with extremely competent experts. Asset Life Settlements understands the legal technical aspects of estate planning, and we have a reputation among buyers for negotiating win-win solutions in spite of the financial complexities of any case.

Obsolete Life Insurance Purchased Years Earlier for Estate Tax Planning

In light of the higher tax exemption amounts set by the 2017 Tax Cuts & Jobs Act (TCJA), many life insurance policies that were purchased for estate tax purposes are no longer necessary. Selling an irrelevant policy helps free up investment capital that can be leveraged more effectively.

If you are a wealth manager, investment advisor, or family office, we encourage you to learn more about how life settlements can help address a variety of complex planning challenges for your clients.