The Insurance Premium Tax is a commonly missed state tax planning opportunity when utilizing insurance, particularly private placement insurance (PPLI). Essentially, the Insurance Premium Tax is a tax that is levied upon insurers, both domestic and foreign, for the privilege of engaging in the business of providing insurance in the state. The tax is passed to consumers through the payment of insurance premiums and it varies dramatically among states. Significant tax savings can be realized simply by purchasing a policy within a trust sitused in a state with a low Insurance Premium Tax such as South Dakota.

Most states in the country have an Insurance Premium Tax between 150 and 250 basis points.

• Nevada = 350 bps
• New York = 200 bps
• Pennsylvania = 200 bps
• California = 233 bps
• Wyoming =75 bps

While Delaware boasts 0 bps on policies owned in trust, it is very important to note that policies held within an LLC owned by the trust (which is the typical structure) are subject to a 200 bps Insurance Premium Tax.

South Dakota has the LOWEST Insurance Premium Tax in the nation at 8 bps that applies BOTH to policies owned directly by a trust AND a policy within an LLC owned within trust.

 

This powerful state tax planning opportunity involving insurance, available by simply selecting a low premium tax jurisdiction like South Dakota, is particularly compelling when considered in conjunction with the fact that South Dakota…

• Is generally regarded by most practitioners and academics, including Steve Oshins, as being the best Dynasty Trust state and having the strongest Decanting Statute in the nation.
• Unequivocally has the most robust privacy laws in the country, as pointed out by an article appearing in the January 2018 edition of Trusts & Estates Magazine comparing U.S. trust jurisdictions wherein the author noted, “Of the top tier trust jurisdictions, South Dakota has the best trust privacy laws.”
• Is one of only two states with a Community Property Trust, a compelling tax planning tool for spouses.
• Is the only state in the country with the Family Advisor, referred to as a “Trust Protector Light.”

For more information on the Insurance Premium Tax and how this tax planning strategy can work in your favor, please reach out to us via our contact page.

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Bridgeford Trust is very proud and honored to announce that we have been named a finalist for WealthManagement.com’s 2018 Industry Awards. WealthManagement.com, considered the leading resource for wealth advisors and planners, is the only awards program of its kind to honor outstanding achievements by companies and organizations that support financial advisor success. The 2018 Industry Awards received a record number of nominations – this year, more than 600 entries were received from nearly 250 companies.

David A. Warren, Bridgeford Trust Co-Founder, President, and CEO states:

“Bridgeford Trust is thrilled to be recognized this year, among many excellent providers, for our leadership and outstanding work with domestic and international families seeking sophisticated and progressive trust solutions.”

Bridgeford Trust’s nomination recognizes its “Coming to America” initiative over the past 18 months, which focused on serving the trust planning needs of large international families seeking U.S. trust solutions. The initiative was carefully planned and executed to support international families coming to the U.S. in need of sophisticated trust solutions around privacy, asset protection, control, flexibility, and tax planning available under U.S. trust law, specifically South Dakota trust law, which has been recognized as the leading U.S trust jurisdiction by planners and commentators and across the nation and around the world. In addition to building a strong internal infrastructure to serve international families, Bridgeford Trust simultaneously launched an aggressive, multi-faceted educational campaign that included:

• Whitepapers
• Blogs
• Videos
• Webinars
• Social media
• Presentations across the country and around the world educating advisors on important trust planning nuances around working with international families coming to the U.S. 

A panel of independent judges made up of top names in the industry will determine the 2018 award winners, who will be announced at a black-tie gala event on September 13, 2018, at the Ziegfeld Ballroom in New York City. For more information about the event or Bridgeford Trust, please reach out to us via our contact page.

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An Incomplete Non-Grantor Trust (“ING”) is a powerful vehicle, particularly for low cost basis assets with a contemplated future sale, that potentially eliminates state income/capital gain tax while taking advantage of Domestic Asset Protection and other progressive modern trust laws. It is an incomplete gift that never leaves the settlor’s estate, which means there is no gift tax. In addition, the trust has a Non-Grantor status, meaning the income is taxed at the trust level, not the individual level, thereby potentially avoiding state income tax on assets within a trust if sitused and properly administered in a no-tax jurisdiction.

Watch this video to learn when to use the ING and to hear more about other state tax planning opportunities that exist by simply creating or moving a trust to a no-tax jurisdiction like South Dakota.

 

For more information on INGs and how this tax planning strategy can work in your favor, please reach out to us via our contact page.

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On June 1st, Bridgeford Trust will be back in Florida to sponsor STEP Miami’s 9th Annual Summit! The Summit, taking place at the Four Seasons Hotel in Miami, is an excellent opportunity to review the latest issues concerning international private client planning and includes presentations by leading professionals in the area. Last year’s Summit attracted more than 250 professionals from around the globe, so you won’t want to miss this one!

The financial services industry has seen a tremendous influx of international families coming to the United States for many reasons, and to South Dakota in particular because of the power and sophistication of its trust laws. South Dakota’s progressive and industry leading trust laws allow families to avail themselves of very strong privacy and asset protection provisions, and to take advantage of South Dakota’s status as a no state income tax state. To learn more about the South Dakota Advantage, click here.

David A. Warren, Co-Founder, President, and CEO of Bridgeford Trust, will be attending the Forum and if you are going to be there as well, we encourage you to visit Bridgeford Trust’s table and talk with us about how we may be able to collaborate to best serve the international community. 

For additional details about the Forum and to register, click here.

We hope to see you there!

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Bridgeford Trust is excited to be sponsoring the STEP International Trust and Estate Planning Forum: Around the Globe in 2018, presented by STEP Los Angeles. Taking place on Thursday, May 3rd and Friday, May 4th in Laguna Beach, CA, this much anticipated event presents the latest issues for international private client planning.

For a myriad of reasons, including asset protection and privacy, international families from around the world are seeking U.S. trust solutions. Below are links to informational pieces that may be of interest to advisors working in the international space.

Foreign Grantor Trust
http://bridgefordtrust.com/what-we-do/foreign-grantor-trust/

Common Reporting Standard
http://bridgefordtrust.com/south-dakota-advantage/common-reporting-standard/

David A. Warren, Co-Founder, President, and CEO of Bridgeford Trust, will be attending the Forum and if you are going to be there as well, we encourage you to visit Bridgeford Trust’s table and talk with us about how we may be able to collaborate to best serve the international community. 

For additional details about the Forum and to register, click here.

We hope to see you there!

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