Arthur Baxter & Allison Baxter

102 Pages·2017·0.8 MB·English

Premium Financing Integrated with Wealthy and Wise (Part 1 of 2)
For: Arthur Baxter & Allison Baxter
Presented By:
[Licensed user’s name appears here]
Premium Financing Integrated with Wealthy and Wise®
Table of Contents
Comparison of:
Current Plan vs. Add Premium Financing Page 1
Financial Analysis:
Details of the Current Plan Page 11
Details of the Premium Financing Page 52
Premium Financing Integrated with Wealthy and Wise®
Comparison of Current Plan vs. Add Premium Financing
Date: 05/18/2017 Page 1 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Testing Financial Tolerance for Premium Financing
Preface
The accompanying report contains an analysis ofyour current financialplan compared to the addition
of a life insurance policy funded by premium financing.
The material examines the following two situations:
Strategy 1 reflects your current financial plan.
Strategy 2 illustrates the results of acquiring a life insurance policy owned by a trust formed on
behalf of your family that is funded using premium financing secured from an independent lender.
The accompanying report is presented in three parts, as follows:
1. Comparison of the results from each Strategy;
2. Details of Strategy 1;
3. Details of Strategy 2.
Although all the material should be reviewed, you may find the most valuable information is in the
Comparison section. The most important individual reports are the Cash Flow Analysis, Hypothetical
Net Worth Illustration, and Wealth Transfer Summary. The balance of the material provides backup
for the overall analysis.
The material presented should provide a sound basis for evaluating your current situation as well as
the effect that this planning strategy has on preservation of your family’s wealth.
Date: 05/18/2017 Page 2 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Comparison of Alternatives
$180,000,000
Effect on Net Worth
(After Providing Spendable Cash Flow)
$135,000,000
$126,330,371
$90,000,000
$83,934,684
Strategy 1
$45,000,000
Strategy 2
$0
50/45 60/55 70/65 80/75 90/85 100/95
Ages (Client/Spouse)
$30,000,000
Effect on Cumulative Spendable Cash Flow Provided by Ages 99/94
$24,184,834 $24,184,834
$22,500,000 Strategy 1 Strategy 2
Current Add
Plan Trust-Owned
Premium
$15,000,000
Financing
$7,500,000
$0
Date: 05/18/2017 Page 3 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Comparison of Alternatives
$240,000,000
Effect on Family Net Worth*
(After Providing Spendable Cash Flow)
$180,000,000
$172,571,120
$120,000,000 $126,330,371
Strategy 2
$60,000,000
Strategy 1
$0
50/45 60/55 70/65 80/75 90/85 100/95
Ages (Client/Spouse)
$30,000,000
Effect on Cumulative Spendable Cash Flow Provided by Ages 99/94
$24,184,834 $24,184,834
$22,500,000 Strategy 1 Strategy 2
Current Add
Plan Trust-Owned
Premium
$15,000,000
Financing
$7,500,000
$0
*Family Net Worth includes assets outside the estate.
Date: 05/18/2017 Page 4 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Comparison of Alternatives
$40,000,000
Effect on Transfer Taxes
$30,000,000 $32,544,832
$20,000,000
$16,258,558
Strategy 2
$10,000,000
Strategy 1
$0
50/45 60/55 70/65 80/75 90/85 100/95
Ages (Client/Spouse)
$30,000,000
Effect on Cumulative Spendable Cash Flow Provided by Ages 99/94
$24,184,834 $24,184,834
$22,500,000 Strategy 1 Strategy 2
Current Add
Plan Trust-Owned
Premium
$15,000,000
Financing
$7,500,000
$0
Date: 05/18/2017 Page 5 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Comparison of Alternatives
$200,000,000
Effect on Wealth to Heirs
$150,000,000 $156,312,562
$100,000,000
$93,785,539
Strategy 2
$50,000,000
Strategy 1
$0
50/45 60/55 70/65 80/75 90/85 100/95
Ages (Client/Spouse)
$30,000,000
Effect on Cumulative Spendable Cash Flow Provided by Ages 99/94
$24,184,834 $24,184,834
$22,500,000 Strategy 1 Strategy 2
Current Add
Plan Trust-Owned
Premium
$15,000,000
Financing
$7,500,000
$0
Date: 05/18/2017 Page 6 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Comparison of Alternatives at Ages 99/94
Strategy 1 Strategy 2
Current Plan Add Trust-Owned Premium Financing
Total Wealth Distributed: $126,330,371 Total Wealth Distributed: $172,571,120
Transfer Taxes
$16,258,558
Transfer Taxes
$32,544,832
Heirs
$93,785,539
Heirs
$156,312,562
Date: 05/18/2017 Page 7 of 100
Comparison of Current Plan vs. Add Premium Financing
Presented By: [Licensed user’s name appears here] For: Arthur Baxter & Allison Baxter
Summary Analysis of Alternatives
Effect on Cumulative Spendable Cash Flow Provided by Ages 99/94
Strategy 1
Current
$24,184,834
Plan
Strategy 2
Add
Trust-Owned
$24,184,834
Premium
Financing
$0 $7,000 $14,000 $21,000 $28,000
(Thousands of dollars)
Values at Ages 99/94
(After Providing Spendable Cash Flow)
$220,000,000
$172.6M
$165,000,000
$156.3M
$126.3M
$110,000,000
$93.79M
$55,000,000
$32.54M
$16.26M
$0
Strategy 1 Strategy 2
Current Plan Add Trust-Owned
Premium Financing
Cumulative Spendable Cash Flow
Family Net Worth*
Transfer Taxes
Wealth to Heirs
*Family Net Worth includes assets outside the estate.
Date: 05/18/2017 Page 8 of 100