Life Insurance Planning Around the World

General Opportunities

• Over $100 billion of U.S. residential real estate purchased each year by Non-Resident Aliens
• Non-Resident Alien millionaires have tripled over past 20 years, outpacing growth of U.S. millionaires
• Non-Resident Aliens own over 20% of investments in U.S. stock

Planning Opportunities for Individuals

• Avoid Forced Heirship Laws
• Family Office / Dynasty Planning
• Estate Enhancement / Equalization
• Asset Protection and Diversification
• Eliminate the Need for a Qualified Domestic Trust
• Easy After Death Administration – Bypass Probate
• Confidentiality
• Increase Charitable Giving
• Minimize the Undistributed Net Income Issue with Foreign Non-Grantor Trusts (Convert Foreign Trust to U.S. Trust)

Planning Opportunities for Businesses

• Use for Buy-Sell Funding
• Cross Purchase Using Trusts and/or Limited
• Liability Companies
• Key Person Coverage
• Pre and Post Retirement Benefits
• Collaterialize Debt

Tax Benefits of Life Insurance for Non Residents (Non-MEC Policy)

• No gift taxes to fund premiums if funds are coming from outside U.S.
• No U.S. estate or generation-skipping transfer taxes on death benefit
• No three year transfer rule
• No income taxation on accumulated cash value
• Tax free access to cash value through partial surrenders up to basis and loans thereafter

Benefits of U.S. Life Insurance

• Stability and Predictability of U.S.
• Highly Regulated Industry
• Denominated in U.S. dollars
• Efficient Pricing
• Innovative New Products

Typical Required Contacts with U.S.

• Own Business in U.S.
• Own U.S. Real Estate
• Own Bank or Investment Account in U.S.
• Work for a U.S. Company
• Have Immediate Family Living in U.S.

Sources of Cash for Premiums

• Split Dollar Policy with Business
• Gifts
• Premium Financing (Where Allowed)

Ownership Structures for Policy

• Create U.S. Limited Liability Company
• Create U. S. Trust

(A) Trust that Does Not Avoid Future U.S. Estate Taxes
(B) Trust that Avoids Future U.S. Estate Taxes

Trust Does Not Avoid Future U.S. Estate Taxes

• Either U.S. Revocable or Irrevocable Trust with U.S. Trustee and U.S. Taxpayer Identification Number
• Trust should be Applicant, Owner and Beneficiary of Policy
• Trust Generally Terminates at Death of Insured Grantor

Trust Avoids Future U.S. Estate Taxes

• U.S. Irrevocable Trust with U.S. Trustee and U.S. Taxpayer Identification Number
• Insured Grantor Can Be a Permissible Beneficiary of the Trust
• Trust should be Applicant, Owner and Beneficiary of Policy
• Trust Continues After Death of Insured Grantor to Avoid Future U.S. Estate Taxes