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Estate Planning Benefits |
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Estate Planning with a Captive Insurance CompanyCaptive Insurance Companies provide Huge Estate Planning Benefits for Business Owners!Captive Insurance Company Estate Planning BenefitsA Captive Insurance Company can provide substantial Estate Planning Benefits. Typically the Captive Insurance Company is owned directly or indirectly by the same individual or individuals who own the businesses which the Captive Insurance Company insures. However, if the Captive Insurance Company is owned by the children or heirs of the owner(s) of the insured businesses, then significant Estate Tax benefits can result. Under such a scenario, the owners of the insured businesses would receive a current year tax deduction for every dollar of premiums paid to the Captive Insurance Company and their children or heirs who own the Captive Insurance Company would not be taxed on these premium receipts up to $1.2 million each year provided the Captive Insurance Company meets the requirements under IRC section 831(b). This effectively transfers wealth from the insured business owners estate in the form of a premium payment, to the estate of his/her children or heirs, without the imposition of any Estate Taxes and with no erosion of his/her Estate's Unified Credit amount. These Captive Insurance Company Estate Planning Tax benefits are significant and should be explored by high net worth individuals who have already decided to form a Captive Insurance Company for non-tax business reasons. |
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