Beware Estate-Tax Trap with Structured Settlements

June 2006
Journal of Financial Planning;Jun2006, Vol. 19 Issue 6, p70
Academic Journal
The article discusses the risks of the estate-tax when dealing with clients who have been awarded a structured settlement coming from a lawsuit. Insurance companies prefer structured settlements because they can keep the majority of assets at any given time, even though they will eventually provide a larger total payment. Financial planners should be aware that if plaintiffs die early in the payout period, the present value of future payments will be included in the estate tax, resulting in severe financial loss.


Related Articles

  • The Seeds of Change. Scroggin, John J. // Advisor Today;Sep2005, Vol. 100 Issue 9, p28 

    The article examines the possible changes to the business of estate planning for financial planners in the United States in view of possible changes in federal estate taxation rulings by the Internal Revenue Service. It is expected that estate planning and probate administration would be two of...

  • A gifting gaffe. Murphy, Brian // Money Marketing;11/4/2004, p61 

    Investigates the use of potentially exempt transfers in inheritance tax planning in the case "Sillars and another v. IRC." Potential implications of placing an asset into joint ownership; Facts of the case; Merits of the case; Decision by the Special Commissioner in favor of the Revenue's view.

  • Following the Settlements in Reinsurance Contracts: An Update.  // MiddleEast Insurance Review;Apr2008, p68 

    The article presents an update on following the settlements in reinsurance contracts on two cases featured in the November 2007 edition of the journal. These cases were WASA International Insurance Co. Ltd. and AGF Insurance Co. v. Lexington Insurance Co., and Aegis Electrical and Gas...

  • fyi.  // Journal of Financial Planning;Jun2001, Vol. 14 Issue 6, p16 

    Presents news briefs related to financial planning as of June 2001. Details on Success Forum, a convention and exposition sponsored by the Financial Planning Association (FPA) in September 2001; Passage of an estate tax repeal by the United States House of Representatives; Opposition of the FPA...

  • Implementing Effective Estate Plans: Do You Really Know What Your Client Is Thinking? Most, Bruce W. // Journal of Financial Planning;Aug1997, Vol. 10 Issue 4, p54 

    This article focuses on the implementation of effective estate plans. There are barriers to effective planning. Many clients simply do not understand the importance of estate planning in general or a specific course of action. Richard Duff, who is working on a new book tentatively titled "Tax...

  • Back from the Future. Shenkman, Martin M. // Financial Planning;Mar2011, Vol. 41 Issue 3, p49 

    The article discusses what financial planners should take into consideration as of March 2011, in light of the 2010 Tax Act implemented. It reports that while the act is only valid till 2012, and that a 1 million dollar tax exemption might be reimposed together with a 55% tax rate, most believe...

  • The year of the adviser.  // Money Marketing;1/5/2006, p19 

    The article reports on the prospects for investment advisers in the year 2006. Investment advisers should feel relaxed that mortgage and general insurance regulation have not caused massive disruption to money market. Investment sector continues to mature in terms of fund selection while in...

  • ScotEq branching out with IHT tree. Shaw, Sam // Money Marketing;1/19/2006, p22 

    The article reports on the information packs offered by Scottish Equitable and Scottish Equitable International to help advisers determine inheritance tax liability. The information packs will contain a series of stages that can be used to establish advisers' clients' needs and develop a trusts...

  • Heir necessities.  // Money Marketing;11/10/2011, p92 

    The article focuses on the inheritance tax (IHT) planning, which plays an important role in financial planning. It states putting a thorough planning strategy by the investment advisers can help spread the message of the importance of IHT planning. It states estate planning can also add value to...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics