Howell & Associates Advanced Planning - Green Bay, Wisconsin

Client Profile

Age: Individuals age 60 and older, insurable and in good health.

Concern: Individuals with assets not needed for income purposes and a desire to leave a legacy for their heirs. Individuals who would like to have the comfort of knowing that they have leveraged their estate to maximize wealth transfer to their heirs, whether they die today or live to life expectancy.

Suitable Assets: Deferred annuities with significant growth above your cost basis, individual retirement accounts, qualified plan assets, and fixed income assets, such as certificates of deposit and municipal bonds.

Tax Status: Individuals in a high marginal income tax bracket with a taxable estate.

Other: Individuals with Excess Assets that can be repositioned into more tax efficient wealth tranfer vehicles.

Estate Maximization

In Estate Max, clients use their excess assets to create an income stream to fund annual premium gifts to an irrevocable life insurance trust (ILIT). The trustee of the ILIT can then leverage these annual gifts by purchasing a life insurance death benefit which, if properly structured, passes tax free to the beneficiary. The annual gifts of premiums made to the ILIT will not be subject to gift tax, if covered by either the client’s annual gift tax exclusion or client’s lifetime gift tax exemption. The life insurance asset can be funded by:

1. Periodically withdrawing and/or liquidating a portion of the client’s excess assets as needed, leaving the balance of the asset to accumulate , or

2. Converting and/or liquidating your excess asset into a single premium immediate annuity (SPIA) with a life only annuity option.

By converting their excess assets into a single premium immediate annuity (SPIA) with a life-only annuity option, your clients can generate a guaranteed income stream which can be used to fund annual gifts of premiums to the trustee of an ILIT. Moreover, since a life-only annuity option is utilized in this approach, the SPIA principal has been removed from the client’s estate and will no longer be subject to transfer taxes at death.


The Estate Max strategy is designed to achieve the following goals: Minimize income taxes and

1. Transfer taxes on excess assets allocated to the strategy.

2. Maximize wealth transfer to client’s beneficiaries.

3. Provide an income stream that can be used to purchase a life insurance death benefit.

4. Provide a life insurance death benefit which passes tax free to the beneficiary.

5. Accumulate assets outside client’s taxable estate.

6. Create a source of liquidity to cover transfer taxes or estate administration expenses.