SFG Blog

Tax-Advantaged Education Funding

By Zarir J. Sethna
Posted on February 15, 2019

Saving for college education can be an intimidating undertaking for many parents who may be inexperienced with tax laws, and unsure how to balance their own financial goals, such as saving for retirement and the financial needs of their children. There are many options available to finance a child’s education, and which one or more options to choose requires consideration of many important factors.

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Irrevocable Life Insurance Trust

By Zarir J. Sethna
Posted on January 8, 2019

An irrevocable life insurance trust (ILIT) can be a useful vehicle to hold life insurance policies outside the grantor’s taxable estate. When an insured owns a life insurance policy on his/her life, the insured controls and has ownership rights over the life insurance, but the policy will be included in the insured’s taxable estate. However, by giving up control and ownership over coverage held within an ILIT...

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Transfer of Policy to or from Business

By Zarir J. Sethna
Posted on January 10, 2019

Certain tax issues arise when transferring a life insurance policy to or from a business. For the most part, life insurance is treated like other appreciated property. Key factors include: the fair market value of the property, the owner’s cost basis, and whether the transfer triggers tax recognition. If taxable, what type of tax is involved: ordinary income or capital gain.

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Basic Estate Planning

By Zarir J. Sethna
Posted on December 13, 2018

Regardless of your level of wealth, the failure to establish an estate plan can be detrimental to your family. A properly structured estate plan helps ensure that your family and financial goals are addressed during your life, if incapacitated, and after your death. The following provides an introductory discussion regarding essential planning individuals should consider, as well as an overview of lifetime gifting strategies and longterm trust planning.

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Series LLC

By Zarir J. Sethna
Posted on November 18, 2018

A Series Limited Liability Company (Series LLC) is a form of entity that allows a single “parent” LLC to partition its assets and liabilities among various sub-LLCs called “Series.” Each Series may have different assets, operations, and/or investment objectives, and the members and managers, as well as their rights, obligations, and their sharing ratios, may be varied in each Series.

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Choosing the Right Insurance Mix

By Zarir J. Sethna
Posted on October 27, 2018

Should you purchase term insurance or is permanent insurance the better buy? If you already own a term policy, should you convert it to a permanent plan, such as whole life? Or is a flexible plan such as universal life the way to go?

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Deferred Compensation

By Zarir J. Sethna
Posted on September 17, 2018

A nonqualified deferred compensation plan is an agreement between an employer and an executive to defer the payment and receipt of compensation to the future for services performed today. The employer makes an unsecured and unfunded promise to pay the amounts specified under the agreement to the executive at some future date. Nonqualified deferred compensation can be utilized in both the employer/executive and the employer/independent contractor context.

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Lifetime Gifts

By Zarir J. Sethna
Posted on August 7, 2018

Many Americans make gifts to their children and other family members. Lifetime gifts may allow a donor to observe how donees will handle the money. Accordingly, the donor can help the recipient learn sound money or business management skills. Making lifetime gifts may require careful planning in light of gift and estate taxes.

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Special Needs Planning

By Zarir J. Sethna
Posted on July 21, 2018

Establish a special needs trust with supporting documents. Working with your attorney, establish a Special Needs Trust designed to hold assets for the benefit of your child. Government benefits are typically “means tested,” so any income or assets owned by your child could impact his or her qualification for benefits.

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Gifts to Minors

By Zarir J. Sethna
Posted on June 19, 2018

Helping a child with his or her education or support often requires gifts. Fortunately, there also may be income and estate tax savings to making gifts to minor children. Gifts can be made directly or indirectly to a child, or to a trust for his or her benefit.

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Revocable Living Trust vs. Traditional Will

By Zarir J. Sethna
Posted on April 14, 2018

Revocable Living Trust: No estate tax savings. Trust assets are included in the grantor's gross estate and subject to estate tax. The same estate tax planning methods are available as with a traditional will.

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Alternatives to Cash on the Balance Sheet

By Zarir J. Sethna
Posted on March 6, 2018

A non-qualified deferred compensation plan is an agreement between an employer and an executive to defer the payment and receipt of compensation to the future for services performed today. The employer makes an unsecured and unfunded promise to pay the amounts specified under the agreement to the executive at some future date. Non-qualified deferred compensation can be utilized in both the employer/executive and the employer/independent contractor context.

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Key Person Life Insurance

By Zarir J. Sethna
Posted on January 14, 2018

A key employee is generally highly paid, responsible for management decisions, has a significant impact on sales, and has a special rapport with customers and creditors. A key employee may or may not be an owner.

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