Today’s “do it yourself” culture and easy access to information has made informed consumers of all sorts of things, from appliances to medical care. Unfortunately, a lot of the information can lead to confusion for people whose needs are more involved and complex than they realize. And to make matters worse, a noticeable amount of information on the Internet is really disinformation.
In working with the high-net-worth classes, The Unger Company is acutely aware of how much of a mistake a simple Internet search for something like “the best life insurance company” can be. The problem isn’t with the companies themselves, but with the fact that HNWI and UHNWI estates have complexity that off-the-shelf products may not effectively address. Someone who is a HNWI or UHNWI who is taking that do it yourself approach to planning things – even if just for informational purposes – can be doing themselves a tremendous disservice.
A big part of the service that The Unger Company provides is designing insurance policies, and their funding, for clients as part of an estate tax strategy so wealth transfer to the next generation will happen with minimal complications and cost. Our extensive knowledge of the tax code enables us to employ long-range tax planning and asset protection techniques that ultimately will protect your family’s financial legacy.
Large estates can be very complicated to deal with when looking down the line toward wealth transfer. People with a reasonable or modest estate don’t require the same kind of intricate strategy, and an off-the-shelf policy can be perfectly fine for them. This is because most people, when choosing life insurance products, are taking a top-down approach: they find policies or agents they like and trust, they choose a very basic type of coverage, they are below the federal estate tax threshold, and the product will probably be effective. For The Unger Company, designing policies for our clients is more like building a house and starting with a solid foundation. We need to make sure that at each level, the policy or policies serve the interest of the estate tax strategy we have implemented with a client’s legal and financial team. We choose the best insurance company and design the best product for each step of this process and make certain that it is absolutely right for a family’s situation. The Internal Revenue Code (IRC) can be unforgiving when it comes to mistakes in a wealth transfer plan, and the asset protection measures could be jeopardized if such exceptional care wasn’t taken to protect a client.
Without an extensive knowledge of the IRC, a HWNI or UHNWI can end up with an outrageous tax bill. The policies we structure for our clients are created so an estate tax bill can be avoided or offset, and these are policies that are carefully tailored to be in compliance with IRC and state regulations. (In a future post, we will discuss “bespoke” insurance policies.) A Top 10 list of “best insurance companies” is not a good place for an ultra-wealthy family to start planning insurance purchases.
In business since 1974, The Unger Company Ltd. specializes in estate tax planning for high-net-worth individuals and ultra-high net worth individuals. Our experience and deep knowledge enable us to help clients by devising elegant, effective, efficient estate tax strategies with their existing attorneys, accountants, and financial advisors. Call us at 212-755-4777 or contact us here to learn more.
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