Now that April 15th has passed, it’s time to be sure that all accountants are aware of life settlements. Why? Tax time is when they are most up-to-date on their clients' finances.
Many accountants remain unaware of life settlements as an alternative to the lapse or surrender of a policy. Introducing them to or reacquainting them with life settlements can be a great door opener for you, and a great way for them to be of added value to their clients. Sharing information about settlements is a terrific way to differentiate you from the competition.
In 2015, per the American Taxpayer Relief Act of 2012 (ATRA), the estate tax exemption is $5.43 million for individuals and, with portability, $10.86 million for married couples. As a result, many clients may no longer need as much life insurance to pay estate taxes. These unneeded policies often have hidden value and can represent outstanding prospects for life settlements.
In addition, because accountants are now current on their clients' financial pictures, it's the perfect time to familiarize them with other situations where a life settlement might apply:
- the sale or termination of a business,
- bankruptcy or an adverse change to a client's financial situation,
- the death of a spouse,
- divorce, and
- the loss of a job.
From a market standpoint, it’s a particularly good time to be sure that all advisors, not just accountants, are aware of life settlements. There is a big supply of money on the buyer side. And so policies are settling for higher amounts than they have in a very long time. Again, this means added value for their clients.
The end of tax season represents a once a year opportunity to get in front of accountants on the most timely and favorable basis. Remember, the proceeds from a settlement can make a really meaningful difference in your clients’ lives.
And now, with buyers looking for attractive policies to invest in, the life settlement opportunity is better than it has been in many years.