Owning Life Insurance Can Make
Estate Planning Complicated
you own an insurance policy on your life and want to keep the
policy's proceeds out of your taxable estate, one option is
selling the policy to an irrevocable grantor trust.
This is preferable to gifting the policy because, if you
transfer a policy to a family member or trust and then die
within three years of the transfer, the policy's proceeds will
be pulled back into your estate.
But this three-year rule doesn't apply
if you transfer a policy as part of a "bona fide sale for
adequate consideration." The problem here is that, when
life insurance is involved, it may trigger the
transfer-for-value rule. A transferee who pays valuable
consideration for a life insurance policy is subject to
ordinary income taxes on the amount by which the proceeds
received exceed the consideration and premiums the transferee
An irrevocable grantor trust solves this
problem because it's structured so that you, the
grantor, are the owner for income tax purposes but not for
estate tax purposes. So the transfer-for-value rule won't
apply because, for income tax purposes, you're essentially
transferring the policy to yourself.
This strategy is complex, so please contact us at 925-634-2344
before taking any action.
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
investment portfolios and manage assets on their behalf.
SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
extension 3638 and follow the instructions. If we’ve
done a good job please let me know. And if we can
improve on anything, please mention that too.
Us Be Found on
Also as we expand our business,
we find more and more people are using
YELP and Google
to look for us by searching Brentwood accountant or
When they do this we want to
be FOUND on GOOGLE. One way you can help us
is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or on our YELP local listing
click here to go to our Google Listing for SMEED CPA and
click on the
YELP link to go there.
Scroll down to the Review area.
On either site it may say: Been here?
Rate and review
You will click on the Rate and
review link and then log in, then
give us a review!
You can choose between 1 and 5
STARS and write in what you think about the tax or accounting
work we have done for you.
It's that simple. Thank
you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,