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New universal life plan from Mutual of Omaha ensures estates go to heirs instead of IRS

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Mutual of Omaha, Omaha, Neb., has introduced their new Guaranteed Universal Life Survivor (GULS) plan, allowing clients to ensure that their estate will go to their heirs instead of the IRS.

GULS is a special type of insurance, sometimes called “second-to-die life insurance” designed to provide funds after the second insured dies.

According to Mutual of Omaha Vice President Andy Hutchison, Product Development, under current federal law there is no estate tax on assets left to a spouse who is a U.S. citizen, but the estate tax kicks in after the second insured dies and the assets are left to children or others.

“Far and away, the most common use for survivor life insurance is to pay the federal estate tax,” Hutchison said. “That reason alone probably constitutes at least 90% of the cases we see.”

Uses for GULS:

  • Fund buy-sell agreements for businesses to buy the company when the last surviving owner dies
  • Provide a special needs trust for a couple with a special needs child to provide support after the parents die. The GULS policy can name a “special needs trust” as the beneficiary without disqualifying the child from state aid or Supplemental Security Income (SSI).
  • Cover estate settlement costs when they are typically the highest, after the second death
  • Preserve charitable gifts efficiently and economically without impacting the estate plan

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