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 Meyer Bendavid, 5757 Owensmouth Ave. # 11, Woodland Hills, CA 91367

 (818) 884-9923 cell (818) 261-2470   meyer5757@aol.com
  Problem Solving
-- California Insurance License # 0B89248 

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Why buy insurance? -You die - How do you pay your bills?- what happens to your family?
The income produced for the survival of the family is now gone. Your family's lifestyle has changed for the worse

 

Do You Have a Will?

  • When was your will drafted?
  • When was your will last reviewed?
  • Have you married or divorced, or borne or adopted children since your will was drawn?
  • Does your will provide for the disposition of your assets to those you wish to receive them if both you
       and your spouse should die simultaneously or within a short time of each other?
  • Is your spouse your executor? If so, is your spouse well versed in the responsibilities of an estate executor?
  • Has your income changed substantially since your will was drawn?
  • Have you moved to a bigger home or a more prestigious neighborhood in the past two or three years?
  • Have you made any specific bequests? If so, have you arranged them to assure that they will not
       so severely reduce your estate that your family will be unable to live as they have become accustomed?
  • Have you moved here from out-of-state since your will was drawn?
  • Is your will in the hands of your attorney or executor, rather than at home or in a safe deposit box?
  • Do you own property in another state? If so, has your will been reviewed to see that
       it is valid under the state’s laws?
  • Does your spouse have a will that is coordinated with yours in the event of simultaneous death?
  • Have you estimated what your family will have to live on after your federal estate taxes, state death taxes
       and estate expenses have been paid? Is this sufficient? Would you feel comfortable if you had only
       this amount to live on and raise a family?
  • Have you discussed the use of certain trusts to manage your estate’s assets after your death
       and/or to reduce your probable tax liability?
  • Have you named guardians for your children? Did you know that the court will if you don’t?

The following is why you need my service:


The following tables and information displays the current information about the Federal Estate Tax
which is evaluated and calculated of - everything you currently own and everything due you -minus exclusions.

This includes homes, apartments, businesses, cars, boats, airplanes, rental moneys, furniture, jewelry, paintings
Property owned outright, such as real estate, personal property,
bonds, stocks, business interests, bank accounts, life insurance, etc., is includable in the gross estate
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Your attorney and accountant will establish your current /future estate taxes due-- minus all the adjustments
for a male to ages 84 and a female age 87.
I will calculate the life insurance premiums necessary using special trusts

to accumulate money for the tax- living expenses - surviving spouse- college funding and bills.
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Tentative Estate Tax

The first step in figuring the federal estate tax is to calculate the tentative estate tax.
You use the estate tax base provided by your accountant and attorney
(gross estate minus deductions plus adjusted taxable gifts)
and look up the tax on the following table.

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Federal Estate Tax 2013

Amount Subject to Tax

Tentative Tax

Over $0 but not over $10,000

18% of such amount

Over $10,000 but not over $20,000

$1,800 plus 20% of the excess over $10,000

Over $20,000 but not over $40,000

$3,800 plus 22% of the excess over $20,000

Over $40,000 but not over $60,000

$8,200 plus 24% of the excess over $40,000

Over $60,000 but not over $80,000

$13,000 plus 26% of the excess over $60,000

Over $80,000 but not over $100,000

$18,200 plus 28% of the excess over $80,000

Over $100,000 but not over $150,000

$23,800 plus 30% of the excess over $100,000

Over $150,000 but not over $250,000

$38,800 plus 32% of the excess over $150,000

Over $250,000 but not over $500,000

$70,800 plus 34% of the excess over $250,000

Over $500,000 but not over $750,000

$155,800 plus 37% of the excess over $500,000

Over $750,000 but not over $1,000,000

$248,300 plus 39% of the excess over $750,000

Over $1,000,000

$345,800 plus 40% of the excess over $1,000,000

Credit

Exempt Amount

$2,045,800

$5,250,000

In general, if you have an estate that is large enough to pay estate tax
(see the Exempt Amount in the table), you will be looking up your tax
on the last line of the table (i.e., for estates over $500,000,
the tentative tax is $155,800 plus 37% on the excess over $500,000).

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Example

 

Tyrell died in 2013, leaving a gross estate valued at $8,250,000.
He had funeral and mortgage expenses totaling $800,000.


After subtracting these expenses, his adjusted gross estate totaled
$7,450,000 ($8,250,000 – $800,000).


Tyrell also had a $200,000 taxable gift that needs to be added back
to the taxable estate to arrive at a taxable base of $7,650,000.


Based on the Estate and Gift Tax Rate Schedule (2013), the tax due equals
$345,000 for the first $1,000,000 and 40% of the excess
of $6,650,000, which equals $2,660,000.

The total estate tax due equals $345,800 plus $2,660,000 for
a total federal estate tax due of $3,005,800.

Remember to subtract the credit amount of $2,045,800, which represents
the $5,250,000 estate exemption amount.
After taking the tax due of $3,005,800 and subtracting
the estate tax credit of $2,045,800, we arrive at an estate tax due of $960,000.


This is a very basic example for the purpose of grasping the estate tax calculation concept.

 

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Computation of the Federal Estate Tax

The following is the basic formula for determining a decedent’s estate tax due:

(1)

Gross estate

 

 $ ________

(2)

Less: Expenses, debts, and losses

 

 

 

(a) Funeral and administrative expenses

($ ________ )

 

 

(b) Debts of decedent, mortgage, losses

($ ________ )

 

(3)

Equals: Adjusted gross estate

 

 $ ________

(4)

Less: Total allowable deductions

 

 

 

(a) Charitable deduction

($ ________ )

 

 

(b) Marital deduction

($ ________ )

 

 

(c) State death taxes paid

($ ________ )

 

 

Total allowable deductions

 

($ ________ )

(5)

Equals: Taxable estate

 

 $ ________

(6)

Add: Adjusted taxable gifts (post-1976)

 

 $ ________

(7)

Calculate: Tentative tax base

 

 $ ________

(8)

Calculate: Tentative tax

 

 $ ________

(9)

Less: Tax paid or deemed paid on prior taxable gifts

 

($ ________ )

(10)

Equals: Estate tax before reduction for allowable credits

 

($ ________ )

(11)

Less:

 

 

 

(a) Applicable credit amount

($ ________ )

 

 

(b) Other credits

($ ________ )

 

(12)

Equals: Estate tax liability

 

 $ ________

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Problem solving


Most of you will have policies that expire. Life insurance should be used to cover your entire life.

Look at the advantages of indexed universal life.

 

  • Greater time periods
  • Flexible payments from minimum to maximum
  • Cash accumulation
  • Borrow the cash without repaying it
  • Cash is tax free and not reported
  • You can set your time period from about ages 82 to 87.
  • Why pay more than necessary
  • An option is an increasing death benefit that keeps up with inflation
  • Pay maximum for 7 years – stop paying insurance continue forever
  • The biggest option - your insurance is set to expire -- call the insurance company for the price to   continue the policy. They can’t stop you from paying.

 

Please e-mail  your suggestions, questions, or decisions to meyer5757@aol.com.

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    29 Reasons To Own Life insurance


1  To Meet Consumer Preferences - Many consumers want some amount of life insurance in place when they die.

2  To Pay for Final Expenses – Consider $25,000 of final expenses in today’s dollars. Using the rule of 72 and a modest 3.5% inflation

rate, a 35 year old requires $139,000 for final expenses at age 85. Using a greater rate of inflation and extended mortality, substantially

more insurance would be needed to cover final expenses.

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3  To Support Children with Special Needs – Supporting children with special needs does not end with their  college graduation –

it lasts for their lifetime. Life insurance can help meet this need. 

4   To Equalize an Estate – A business owner may want to leave the family business to a child-employee without “cutting out”
other children who are not in the business. Paying life insurance proceeds to a trust can help equalize the amount each child receives.

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5   To Pay Off a Mortgage – Many consumers will not be mortgage-free in retirement. Consider homes purchased at older ages, homes
financed to pay for college, refinanced homes and vacation homes. Life insurance can help pay off the mortgage for a surviving spouse.

 

6   To Replace an Estate – Some consumers may want to spend down assets during their lifetime while leaving a substantial
inheritance to their heirs. Life insurance can help replace the assets spent.


7   To Replace the Value of a Home in a Reverse Mortgage– Insureds may want to tap into the equity in their home via a reverse

mortgage without eroding their family’s inheritance. Independent from the mortgage, clients may seek a life insurance policy to help

replace the assets spent.

 

8   To Provide Cost Recovery for a Dependent Parent or In-Law –The cost of supporting dependent parents or in-laws may
be substantial. Owning adequate life insurance on their lives may recover these costs.

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9   To Provide Living Benefits for a Dependent Parent or In-Law – Many permanent life insurance products provide living benefits and
long term care benefits.  

10  To Maximize a Pension
– A retiree may elect to take the highest (life) payout option on his/her pension, while still wanting to protect
the surviving spouse. Life insurance can help meet this need.

 

11  To Replace Social Security at Death – Social Security benefits do not pass on to the decedent’s surviving children. Life insurance
can help ease this potential financial loss.

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12  To Supplement Retirement – The cash value of a life insurance policy can make an excellent retirement supplement.

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13  To Provide Tax Treatment Diversification – Under current tax regulations, life insurance cash values grow tax-deferred
and offer tax-favorable access to that cash value by allowing withdrawals up to the cost basis and borrowing thereafter.

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14   To Provide Creditor Protection – Some state statutes protect policy cash values from the claims of creditors.

 

15   To Provide an Asset That is Not Subject to the Alternative Minimum Tax (AMT) – AMT affects many middle class folks;
it is no longer a problem just for the wealthy. Under current tax law, policy cash values and death benefits of individual policies
are not subject to the AMT.

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16  To Own an Asset That Is Not a Factor in Determining Eligibility for Financial Aid – As a general rule, policy cash value
is not a factor used in determining eligibility for financial aid for college.

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17  To Provide Insurance to Unhealthy Individuals Owning Soon To Expire Convertible Term – Uninsurable or rated clients
may own level term policies that are about to expire. Converting these policies before expiration can guarantee* continuation
of coverage (if the policy provides for conversion rights).

 

18  To Mitigate Taxation of Social Security Benefits – Currently, income from policy loans does not impact the income
calculation for taxing Social Security benefits.

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19   To Replace Income with Respect to a Decedent on Qualified Assets – Tax deferred accounts, such as qualified retirement
plans, are subject to income taxes at the death of the owner (except for transfers to spouses). Life insurance can help replace
these taxes.

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20   To Pay Estate Taxes – Clients with larger estates may be subject to substantial estate taxes at death. Life insurance
owned by an ILIT can escape estate taxation and provide the liquidity needed for the estate.

21   To Provide Liquidity to Pay Estate Taxes –Estates of wealthier clients may contain illiquid assets such as real estate
or a family business. Life insurance (owned by an irrevocable life insurance trust, or ILIT) can provide the necessary liquidity
to help pay estate taxes.

 

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22   To Leverage a Gift – Annual exclusion or lifetime gifts can be leveraged up many times by using them to purchase a
life insurance policy outside of the gross estate.

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23   To Hold By-Pass Trust Assets –If the beneficiary of a by-pass trust does not need (all) the trust principal, assets can
be used to purchase life insurance. The asset is leveraged up many times, income taxes on the growth of the assets are
minimized and a federal income tax-free death benefit is created, based on current tax laws.

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24   To Replace a Trust that Terminates at the Death of a Beneficiary – Certain trusts terminate at the death of the beneficiary.
Using trust assets to purchase life insurance during the beneficiary’s lifetime means he/she can continue his/her legacy
to his/her heirs.

 

25   To Leverage a Charitable Gift –A charity can use relatively small annual gifts and leverage them into a potentially
relatively large death benefit payable at the death of the donor through the purchase of life insurance.

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26  To Replace a Charitable Gift – Clients may wish to leave certain assets to charity at death. Life insurance provides
for the replacement of donated assets that heirs would have otherwise inherited – such as taxable retirement accounts.


27  To Provide for Business Continuation – Permanent life insurance is typically a better solution than term for funding a
business continuation plan. It insures that the policy will be in force regardless of how long the business owner stays active
in the business. Policy cash values may be available to fund a lifetime buyout or supplement an owner’s retirement. Under
current tax law, funding a business continuation plan is a valid business purpose for accumulation of assets and is not subject
to the excess accumulations tax. A Waiver of Premium Rider would provide additional benefits to help complete the package.

28   To Provide for Executive Benefits – If structured properly, policy cash values can be used to fund deferred compensation
retirement benefits paid to executives. Death benefits can be used as cost recovery mechanisms for the company.

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29   To Provide for Repurchase of ESOP Shares – Many Employee Stock Ownership Plans (ESOPs) require the company
to re-purchase the shares upon the death of an owner/employee. Life insurance can help provide the funding for this obligation.

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