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Contacting CPAs about life settlements? Do it now

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April 15th is the end of tax season. It also marks the beginning of the season for calling on accountants as centers of influence. Why? It’s the time of year when they are most up to date on their clients’ finances.

This year, however, it is particularly important to get in touch with tax advisors. The passage of the American Taxpayer Relief Act of 2012 (ATRA) means that many clients’ estate plans and insurance needs may have changed and require review.

ATRA increased the estate tax exemption to $5.25 million for individuals and, with portability, $10.5 million for married couples. The exemption is also indexed to inflation. In addition, unlike other recent tax acts, ATRA has no expiration date, which makes it as permanent as any tax legislation can be.

The ATRA increase to the estate tax exclusion significantly reduces the potential future estate tax liability for many taxpayers. 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.

See also: Plenty of life settlement opportunities, post fiscal cliff

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 yourself from the competition.

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:

  • retirement,
  • 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.

The end of tax season represents a once-a-year opportunity to get in front of accountants on the most timely and favorable basis. This year, with the tax changes brought on by ATRA, the life settlement opportunity is greater than ever!

For more from Robin S. Weinberger and Peter N. Katz, see:

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