Cashing in the Policy: Will Looming Financial Regulation End the Use of Private Placement Life Insurance in Estate Planning?

The financial decline in 2008 had an expanding effect on financial investments. This includes hedge funds, which are largely unregulated. With the collapse of personal investment accounts, many investors lost everything, which is leading to a push for more regulation in the privet funds arena. Estate Planners have largely used hedge funds for wealthy individuals in order to minimize estate and gift tax liability. Thus, regulations can have a positive and negative effect for estate planners. These new regulations greatly limit the ability to find estate and gift tax exemptions. However, a loophole exists for small to medium size private funds for insurance companies. Thus, this article discusses how estate planners can use this exemption to protect client’s assets.