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Financial Planning > Tax Planning

We are 21st Century problem solvers

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Many columnists discuss the challenges Americans are facing and will face in the future, and sometimes they make these problems seem overwhelming. How can you use that emotion to help your prospects and clients?
I use that feeling as a tool to inspire people to consent to a process of discovery about their needs and desires. Others may call this “fact finding.” Whatever term is used, this is the first step toward convincing a prospect or client to take action.

Discussing recent events helps my prospects and clients understand that they must take care of themselves by taking control of their financial futures. They must stop depending on governments, corporations and companies, unprepared and unwilling to deal with the coming financial storm.

Truly understanding that concept creates a sense of urgency to act now, and gets people emotionally invested in finding a solution to protect their family. Many agents and financial service professionals are unsuccessful because they skip this step.

An immediate solution I can offer is the idea of using the zero percent capital gains tax. Many seniors hold on to stocks and mutual funds because they have had substantial gains. I have a client who owned Pillsbury stock, and it had split so many times that it had zero basis. He was waiting until death so his heirs would receive a “stepped up” basis and could sell with little or no capital gains tax.

Current law partially changes that in 2010. Congress cannot and will not allow an entire asset category to remain untaxed in the future, as the government needs more and more revenue. I ask, “Will you depend on government or would you prefer to control you own tax rate?” They always opt for control.

Then, I explain Van Mueller’s “Rule of 89-15″: In 2009, if married, filing jointly, taking the standard deduction, and over 65 years old, you can have $89,000 of gross income and be in the 15 percent income tax bracket. Current law says that if you are in the 15 or 10 percent bracket, you pay zero percent on capital gains.

Imagine how thankful your qualified prospects and clients will be when you help them pay the least tax possible. Repositioning that money can also solve other issues. Enhanced income, increased asset value, and reduced volatility are other benefits of this strategy.

Furthermore, many people choose life insurance to reposition, because they weren’t using the money anyway. Life insurance provides a tax-free stepped-up death benefit. You have the tools to create more value for your clients and their families than they ever dreamed possible.


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