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Compliance Simplifier: Unlocking the Advantages of PPLI

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Private Placement Life Insurance (PPLI) offers a range of advantages that can greatly simplify compliance and enhance the management of assets. In this blog post, we will explore these advantages in detail and shed light on how PPLI can be a valuable tool for individuals and businesses. Let’s dive in!

  1. Ease of Reporting to Tax Authorities

One of the key benefits of a properly structured PPLI policy is the ease of reporting to tax authorities. The beneficial owner of the assets within the policy is the insurance company itself. This means that reporting obligations become significantly streamlined. Since the assets are held in segregated accounts, often spread across multiple jurisdictions worldwide, the insurance company acts as the administrator of these assets on behalf of the policy owner.

The segregation of accounts ensures that the assets held within the policy are distinct from the insurance company’s balance sheet. In many cases, a custodian bank is entrusted with the responsibility of safeguarding these assets. This arrangement not only simplifies reporting but also provides an added layer of security and transparency.

  1. Straightforward Administration of Assets

Another advantage of PPLI is the straightforward administration of assets. PPLI companies typically accept qualified institutions to serve as custodians, and qualified asset managers to oversee the investments in the segregated accounts. This flexibility allows policy owners to work with trusted professionals of their choice while benefiting from the efficient administration offered by the insurance company.

By leveraging the expertise of experienced custodians and asset managers, policy owners can ensure that their assets are managed in a manner aligned with their financial objectives. This collaborative relationship between the insurance company, the custodian, and the asset manager is reinforced by the legal frameworks in place in jurisdictions where PPLI companies are located. As a result, PPLI structures gain viable commercial substance, further enhancing their attractiveness.

Expanding on the Endnotes:

Endnote 1: “Private Placement Life Insurance (PPLI)” is a concept that has gained recognition and usage in the financial industry. To delve deeper into the topic, you can refer to the comprehensive Wikipedia page on PPLI. Additionally, “The New Age of Global Tax Transparency and Registers of Beneficial Owners: The Compliant Solution” is an insightful resource published by Taxlinked.net, offering valuable insights into the evolving landscape of global tax transparency.

Endnote 2: In his book, “The PPLI Solution: Delivering Wealth Accumulation, Tax Efficiency, and Asset Protection Through Private Placement Life Insurance,” Michael Malloy CLU TEP RFC discusses various aspects of PPLI, including tax management and wealth-building strategies. This resource serves as a valuable reference for individuals interested in exploring PPLI further.

In conclusion, PPLI is a compliance simplifier that empowers policy owners with a range of advantages. From streamlined reporting to tax authorities and efficient asset administration to the infusion of commercial substance, PPLI offers a compelling solution. By partnering with reputable custodians and asset managers, individuals and businesses can navigate the complexities of wealth management while ensuring compliance and optimizing their financial goals. We, @ EWP Financial are here to help you!

Contact us for any questions you may have.

Disclaimer: The information provided in this blog post is for informational purposes only and should not be considered as legal or financial advice. It is recommended to consult with a qualified professional before making any financial decisions.

 

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

Privacy

Privacy Today – by Michael Malloy CLU TEP RFC

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HOW?

A Private Placement Life Insurance (PPLI) asset structure could have easily prevented life changing invasions of privacy

(Watch videos at the end)

Introduction

Privacy has become a hot topic in recent years, with numerous controversies surrounding the collection and use of personal data by tech companies and governments. As technology continues to advance, it is important for individuals to understand their rights to privacy and the steps they can take to protect it. This article will summarize key points from a blog post on the topic of privacy and outline the most important takeaways.

The Importance of Privacy

The blog post begins by emphasizing the importance of privacy in today’s world. With the widespread use of technology, personal information is being collected and shared at an unprecedented rate, and it is essential for individuals to understand the implications of this. Privacy allows individuals to control who has access to their personal information, what that information is used for, and how it is shared. This control is essential for ensuring that personal data is not misused or abused.

Key Privacy Concerns

The blog post goes on to discuss some of the key privacy concerns that individuals should be aware of. These include:

  • Data collection: Tech companies and other organizations collect vast amounts of data on individuals, often without their knowledge or consent. This data can include everything from online searches and location data to purchasing history and social media activity.
  • Data sharing: Once personal data has been collected, it can be shared with other organizations, either for commercial purposes or for government surveillance. This can result in sensitive personal information being disclosed without the individual’s knowledge or consent.
  • Data breaches: Data breaches are a major concern in today’s world, as they can result in sensitive personal information being leaked to unauthorized individuals. This can include everything from financial information and Social Security numbers to personal health records and emails.
  • Government surveillance: Governments around the world are increasing their use of technology to monitor citizens, and this can have serious implications for privacy. For example, many governments collect data on internet activity and use this information for surveillance purposes.

Protecting Privacy

The blog post concludes by offering practical tips for protecting privacy in the digital age. These include:

  • Being aware of privacy policies: When using technology, it is important to be aware of the privacy policies of the companies and organizations involved. This includes understanding what personal data is being collected and how it is being used.
  • Using encryption: Encryption is a powerful tool for protecting personal data, as it ensures that information is only accessible to those with the necessary key. This can be especially important when using public Wi-Fi networks, as these are often unsecured and vulnerable to eavesdropping.
  • Being careful with personal information: Individuals should be careful about the personal information they share online, as this information can be used for malicious purposes. This includes being mindful of the information shared on social media, as well as avoiding responding to phishing scams or giving out personal information in response to unsolicited emails.

Conclusion

In conclusion, privacy is a crucial issue in today’s world, and it is essential for individuals to understand the threats to their personal information and the steps they can take to protect it. By being aware of the key privacy concerns and taking practical steps to protect their data, individuals can ensure that their personal information remains safe and secure. The blog post provides a wealth of information on the topic of privacy and is an excellent resource for anyone looking to learn more about this important issue.

Watch one of our most descriptive EWP Stories about #Privacy to understand more

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

Financial Privacy

Privacy – EWP Stories – Continuation

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Privacy: A Global Context

Private Placement Life Insurance Delivers:

Enhanced Privacy

This week we embark on a new short video series that gives you the highlights of our previous Stories series. We begin with Carlos Gutierrez and his family. In Part One, you will learn of the kidnapping of his daughter, Lucinda, by a powerful Mexican drug cartel, and the request of a $10M ransom. What unfolds is a far too common occurrence in Latin American countries, and can be greatly mitigated with a properly structured PPLI policy that follows the dictates of an EWP asset structure.

Read the full Article

Watch Part II

Watch Part III

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

The 6 Principles Video Suite

The Six Principles Video Suite – The 6 principles of the United Nations Global Compact

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The 6 principles of the United Nations Global Compact

The Six Principles Video Suite

At EWP Financial we use our own unique brand of asset structuring that incorporates the six principles of Expanded Worldwide Planning (EWP). Wikipedia features the six principles of EWP in its article on International Tax Planning. There is also a section on Expanded Worldwide Planning in Wikipedia’s article on Private Placement Life Insurance.

The six principles are privacy, asset protection, tax shield, succession planning, compliance simplifier, and trust substitute. Each of these six principles provide essential benefits to wealthy families throughout the world. The relevance of each of these principles varies according to where in the world the family holds their assets and does business, so it is essential to work with someone that has a global worldwide grasp of this complex situation, as we do at EPW Financial.

We have created six videos, each less than one minute in length, to provide you with the essential elements of these six principles. The six principles form the building blocks of our unique asset structures. A wide variety of asset classes can be maximized for tax efficiency, asset protection, and privacy by employing these six principles.

You can view these six short videos by going to our YouTube channel, EWP Financial, and clicking on Videos, then The Six Principles Video Suite.

This week we continue our series on the United Nations Global Compact with a short video on the importance of Purpose for an EWP asset structure.

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

EWP Financial & PPLI

PPLI and EWP Financial

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Private Placement Life Insurance and EWP Financial

Why EWP Financial?

(Updated)

EWP Financial is one of a handful of firms worldwide that specialize in Private Placement Life Insurance (PPLI). Even so, EWP Financial sets itself apart from this elite niche because it markets itself directly to the world’s wealthiest families, while its competitors rely mostly on referrals from other professionals.

How does EWP Financial accomplish the daunting task of reaching the world’s wealthiest families directly?  In part by the fact that its founder and director, Michael Malloy, has authored two books on PPLI, written hundreds of articles, and produced close to 50 videos on its YouTube channel, EWP Financial, all with the specific purpose of reaching out directly to wealthy families.

Latest Article: PPLI – A way to preserve wealthPPLI Article

What ever induced EWP Financial to set out on this most difficult course? Here is what Mr. Malloy says:

“Over the years, I have found that wealth creators are able to grasp the unique benefits of structuring their assets using PPLI quite readily. Once they understand the considerable benefits and show willingness to come on board, we can then also educate their tax and legal advisors. This process has proven itself to be more effective and expedient.”

“The wealth creators have an intuitive sense honed by many years of business experience. They understand complex issues without having to delve immediately into technical issues. We can then provide their advisors with the appropriate tax codes and examples of the many structures that we have successfully completed if they so wish. Most often, the advisors then readily come on board as well.”

Why do advisors need to be educated on this subject? Alas, there are no questions on the CPA or the bar exam about PPLI asset structures. Thus professionals need to learn about these specialized structures in the midst of their practices. They would also have to have a practice that includes the world’s wealthiest families. This then is a rarefied group and most advisors welcome the expert education we provide.

EWP Financial enjoys the challenge of reaching the select audience of the world’s highest wealth achievers. We at EWP Financial, have carved for ourselves a niche with few competitors, and are very happy to have done so.

 Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

 

 

Did you know this about PPLI and EWP - 5

Did You Know This About #PPLI & #EWP? – Episode – 5 – EWP: The Deep Internal Design

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Did you know this about Private Placement Life Insurance
&
Expanded Worldwide Planning?

EWP: The Deep Internal Design

PPLI Is a Cornerstone of Stability

In this Episode we explain the elements that comprise a successful EWP Asset Structure. We also reveal why an EWP Asset Structure always outperforms a taxable investment. Our conservative and straightforward approach to asset structuring gives you the maximum amount of tax efficiency, asset protection, and privacy. This is why an EWP Asset Structure has the reputation as the best asset structure available today for wealthy families worldwide.

Key to an EWP Asset Structure is how the investments are handled. To give you excellent insights into this key topic, we bring you an article by Bradley Barros from The Street: C Suite Advisors. Mr. Barros describes PPLI as “the ultimate ownership structure for high-networth families and individuals.” Here is how Mr. Barrors outlines the investment components of EWP Asset Structures:

  • An Insurance Dedicated Fund (“IDF”) holds the majority of the policy investment assets. The IDF is a preferred vehicle to hold assets within a policy structure. Separately Managed Accounts (“SMA”), properly administered, are permissible.
  • The creation of the IDF and the manager you choose is client need driven.
  • Based upon performance and consultation with the insurance carrier.
  • Flexibility is built into the policy and the investment strategy, allowing changes when desired.
  • The IDF or SMA are designed to achieve a diversified portfolio.
  • The portfolio will become more diversified over time as earned dividends are reinvested without deductions for taxes.
  • In addition, the manager can sell appreciated assets without capital gains exposure. This would be done confidentially due to the policy asset protection.
  • The policy structure is designed to both protect assets and maintain anonymity.

Investing Through a Customized Private Placement Policy

  • PPLI policies, and the contract structure and terms, are customized to suit the client, their needs, and their situation.
  • These policies can hold traditional bankable assets, as well as a variety of business interests in nearly any type of industry, commercial and residential investment real estate, intellectual property rights, music catalogs, artwork, oil and gas holdings, and other holdings as part of the Cash Value.
  • The policy Cash Value can be structured to grow tax advantaged, accessed tax-free through withdrawals and policy loans that do not need to be repaid during life, and tax-free death benefits
  • Policy holders may suggest their own trusted investment advisors to oversee and manage the policy cash value holdings, subject to communication with the PPLI insurance carrier, and investments may be held in custody at the selected investment manager’s firm.
  • There is complete transparency of costs on a pre-arranged term sheet. There are generally no commissions, only fully disclosed management fees charged by the PPLI Insurer.
  • The policies can be owned by trusts and other structures that are regulated by state law and provide valuable privacy and protection to policy owners and beneficiaries.
  • The policy Death Benefit may be acquired at a much-lower net cost, versus mass-marketed and retail insurance policies.
  • Policies may distribute life insurance proceeds “in-kind”. In-kind assets can include the actual stock or ownership interests in private equity and real estate”.

We invite you to join our long list of satisfied clients by contacting us on our worldwide toll-free number, 877 811 5846. We welcome your comments and questions.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPLI and EWP-Video 4

Did You Know This About PPLI & EWP? – Episode 4 – Life Insurance: The Magic Ingredient

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#PPLI & #EWP FUNDAMENTALS

Did you know this about Private Placement Life Insurance and Expanded Worldwide Planning?

Private Placement Life Insurance (PPLI) In Action

EWP and PPLI: A Unity of Assets and Life Insurance

To truly appreciate what Private Placement Life Insurance (PPLI) can accomplish, you first must forget everything you currently know about life insurance. Yes, it is life insurance, but so radically different in cost and benefits, it has its own Wikipedia page, International Tax Planning.

On this page, you will read about the six principles of Expanded Worldwide Planning (EWP). We give you a short description of these six principles from the Wikipedia page later in this article.

First, let us list the key benefits of PPLI, so you can appreciate why Bloomberg said in a recent article:

“Athletes, celebrities, and family offices are embracing private placement life insurance, or PPLI, as a way to preserve wealth for their heirs. It’s a strategy that’s perfectly legal and has existed for decades.”

This is why Bloomberg is so excited about PPLI. In a properly structured policy:

  • All cash value growth grows tax-deferred, and is paid out as a tax-free death benefit;
  • No income taxes, and this includes capital gains tax;
  • Ability to access the cash value through tax free loans;
  • Adds asset protection and privacy;
  • Limited reporting;
  • Ability to avoid estate taxes;
  • No surrender charges.

An outstanding singular feature that catapults PPLI above any other life insurance policy is that all asset classes can be placed in a policy:

  • Real Estate/Physical assets
  • Hedge Funds/Alternative Asset classes
  • Private Equity
  • Intellectual Property
  • Art
  • Yachts and Private Jets
  • Alternative Currency denominations

Now let’s discuss the low-cost of this unique wealth structure tool. Depending upon the assets inside the policy, the total fees for a PPLI are 1-2% of the asset value in the policy. The cost of insurance charges are institutionally priced at the wholesale reinsurance company rates.

The death benefit is insured with these same reinsurance companies, the largest insurance companies in the world like Swiss Re and Munich Re with trillions of dollars in assets.

“To be eligible for a PPLI policy one must generally be what the SEC terms a Qualified Purchaser, having not less than $5M of investments. Most companies’ minimum premiums are also $5M.”

From the Wikipedia page, International Tax Planning, we give you the six principles which are making PPLI such a sought after wealth structuring technique.

Privacy

EWP gives privacy and compliance with tax laws. It also enhances protection from data breach and strengthens family security. EWP allows for a tax compliant system that still respects basic rights of privacy. EWP addresses the concerns of law firms and international planners about some aspects of CRS related to their clients’ privacy. EWP assists with the privacy and welfare of families by protecting their financial records and keeping them in compliance with tax regulations.

Asset protection

EWP protects assets with segregated account legislation by using the benefits of life insurance. This structure uses asset protection laws in the jurisdictions of residence to shield these assets from creditors’ claims. A trust with its own asset protection provisions can still receive additional protection with the policy.

Succession planning

EWP includes transfers of assets without forced heirship rules directly to beneficiaries using a controlled and orderly plan. This element of EWP provides a wealth holder a method to enact an estate plan according to his/her wishes without complying with forced heirship rules in the home country. This plan must be coordinated with all the aspects of a properly structured PPLI policy together with other elements of a wealth owner’s financial and legal planning.

Tax shield

EWP adds tax deferral, income, estate tax benefits and dynasty tax planning opportunities. Assets held in a life insurance contract are considered tax-deferred in most jurisdictions throughout the world. Likewise, PPLI policies that are properly constructed shield the assets from all taxes. In most cases, upon the death of the insured, benefits are paid as a tax free death benefit.

Compliance simplifier

EWP adds ease of reporting to tax authorities and administration of assets, commercial substance to structures. In addition, the insurance company is considered the beneficial owner of the assets. This approach greatly simplifies reporting obligations to tax authorities because assets in the policy are held in segregated accounts and can be spread over multiple jurisdictions worldwide.

Trust substitute

EWP creates a viable structure under specific insurance regulations for civil law jurisdictions. It also creates a new role for commercial trust companies. In most civil law jurisdictions, trusts are poorly acknowledged and trust law is not well developed. As a result, companies with foreign trusts in these civil law jurisdictions, face obstacles.

Conclusion

A PPLI asset structure is arguably the most efficient structure available today for wealthy families who wish a conservative and efficient structure to integrate tax-free investment growth, wealth transfer, and asset protection.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

Fundamentals of PPLI and EWP - Episode 3

Did You Know This About PPLI & EWP? – Episode 3 – EWP’s Foundation Is The Six Principles

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Fundamentals of Private Placement Life Insurance
&
Expanded Worldwide Planning

 

Did You Know This About PPLI & EWP?

EWP’s Foundation Is The Six Principles

Video 3

It makes sense to partner with a concept that is recognized as a cornerstone of financial stability—the six principles of Expanded Worldwide Planning, or EWP for short. The six principles are recognized as such by Wikipedia in its article on International Tax Planning. You too can employ these principles to grow and strengthen your own financial assets. How can you accomplish this? By using an asset structure that has at its very roots the six principles of EWP.

Here is the text from Wikipedia’s article on International Tax Planning which features the Six Principles of EWP

International Tax Planning

International tax planning, also known as international tax structures or expanded worldwide planning (EWP), is an element of international taxation created to implement directives from several tax authorities following the 2008 worldwide recession.

History

In 2010, the United States introduced the Foreign Account Tax Compliance Act (FATCA). Later the Organization for Economic Co-operation and Development (OECD) expanded these directives and proposed a new international system for the automatic exchange of information – known as the Common Reporting Standard (CRS). The organization also attempted to limit companies’ ability to shift profits to low-tax locations, a practice known as base erosion and profit shifting (BEPS). The goal of this worldwide exchange of tax information being tax transparency, it requires the exchange of a significant volume of information. As a result, there are concerns about privacy and data breach in interested industries. EWP has been an important element on the agenda of the OECD following the succession of leaked revelations about various jurisdictions, including the Luxembourg Leaks, Panama papers and Paradise papers. In December 2017, European Union finance ministers blacklisted 17 countries for refusing to cooperate in its investigation on tax havens

Principles

EWP allows a tax paying entity to simplify its existing structures and minimize reporting obligations under the Foreign Account Tax Compliance Act (FATCA) and CRS. At the heart of EWP is a properly constructed Private placement life insurance (PPLI) policy that allows taxpayers to use the regulatory framework of life insurance to structure assets along the client’s planning needs. These international assets can also comply with tax authorities worldwide. EWP also brings asset protection and privacy benefits that are set forward in the six principles of EWP below. The other elements in the EWP structure may include the client’s citizenship, country of origin, actual residence, insurance regulations of all concerned jurisdictions, tax report requirements, and client’s objectives.

Planning with trust and foundations frequently offer only limited tax planning opportunities whereas EWP provides a tax shield. Adding a PPLI policy held by the correct entity in the proper jurisdiction creates a notable planning opportunity.

Features

Privacy

EWP gives privacy and compliance with tax laws. It also enhances protection from data breach and strengthens family security. EWP allows for a tax compliant system that still respects basic rights of privacy. EWP addresses the concerns of law firms and international planners about some aspects of CRS related to their clients’ privacy. EWP assists with the privacy and welfare of families by protecting their financial records and keeping them in compliance with tax regulations.

Asset protection

EWP protects assets with segregated account legislation by using the benefits of life insurance. This structure uses asset protection laws in the jurisdictions of residence to shield these assets from creditors. A trust with its own asset protection provisions can still receive additional protection with the policy.

Succession planning

EWP includes transfers of assets without forced heirship rules directly to beneficiaries using a controlled and orderly plan. This element of EWP provides a wealth holder a method to enact an estate plan according to his/her wishes without complying with forced heirship rules in the home country. This plan must be coordinated with all the aspects of a properly structured PPLI policy together with other elements of a wealth owner’s financial and legal planning.

Tax shield

EWP adds tax deferral, income, estate tax benefits and dynasty tax planning opportunities. Assets held in a life insurance contract are considered tax-deferred in most jurisdictions throughout the world. Likewise, PPLI policies that are properly constructed shield the assets from all taxes. In most cases, upon the death of the insured, benefits are paid as a tax free death benefit.

Compliance simplifier

EWP adds ease of reporting to tax authorities and administration of assets, commercial substance to structures. In addition, the insurance company is considered the beneficial owner of the assets. This approach greatly simplifies reporting obligations to tax authorities because assets in the policy are held in segregated accounts and can be spread over multiple jurisdictions worldwide.

Trust substitute

EWP creates a viable structure under specific insurance regulations for civil law jurisdictions. It also creates a new role for commercial trust companies. In most civil law jurisdictions, trusts are poorly acknowledged and trust law is not well developed. As a result, companies with foreign trusts in these civil law jurisdictions face obstacles.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-Kind Premiums Transfers

Did You Know This About PPLI & EWP? – Episode 2 – In-Kind Premiums Transfers

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Did You Know This About Private Placement Life Insurance and Expanded Worldwide Planning?

In-Kind Premiums Transfers

Welcome back to our series: Did you know this about PPLI and EWP? Today we highlight one unique feature of Expanded Worldwide Planning, or EWP for short. A powerful element of our EWP asset structures is the ability to accept in-kind premiums. This means that you can contribute almost any asset class to a properly designed EWP asset structure. This includes real estate, investments like private equity and hedge funds, as well as art and other collectibles.

At the conclusion of the text of our video, we bring you an excellent article from wealth management.com. This article explains in-depth why the ability to accept in-kind premiums in a PPLI policy, gives you a distinct advantage in creating your asset structure.

What is an in-kind premium? It is an exchange. Nature does this consistently, exchanging various elements in the atmosphere, sometimes with exceptional beauty?

Some exchanges are fast, and others slow.

Translating this into financial language: we can place most asset classes into your policy with relative ease, and others, say real estate with a low basis, take more planning and care.

With an in-kind premium transfer your assets do not become a pale reflection of themselves, but you retain ownership of the assets through separate accounts within the policy structure.

For over 25 years, we have created asset structures that are optimized for tax efficiency, asset protection, and privacy.

The end result of placing in-kind premiums into an EWP Asset Structure is a financial gift you will truly treasure.

Planning Using In-Kind Premiums

Private placement variable life insurance can be a useful utility knife for planners.

Steven A. Horowitz, Esq., Gerald Nowotny, JD, LLM and Bradley A. Barros

In 1752 when Benjamin Franklin formed The Philadelphia Contributionship, the organization became the first insurance company in the American Colonies. While much has changed over the past 268 years, the Contributionship still remains in business today, and along with it, the concept of transferring “value” in exchange for goods and services.

Since the beginning of 2000, high-net-worth families have worked with the world’s leading law firms in developing custom-designed variable universal life insurance policies to provide a more complete life insurance solution for their families (a wide array of benefits to their loved ones) and for charities. These policies have been sold via the use of Regulation D “private placement” documents or “PPMs” for securities law purposes. These customized insurance policies are frequently funded with a combination of cash and certain non-cash assets, which can include interests in private equity, real property, hedge funds, artwork, aircraft and qualifying majority-owned entities via in-kind contribution.

Overview of In-Kind Premiums

Many tax and life insurance practitioners are unaware that hard-to-value assets, such as interests in private business entities and real estate holding companies (“non-bankable assets”) or “in-kind” premiums are readily accepted by life insurance companies whose primary market focus is with HNW clients seeking customized client-centric life insurance protection plans. For this reason, advisors and their clients miss a variety of the tax-planning solutions that can lead to greater protection and significantly greater tax-advantaged wealth accumulation over the lifetime of the policyholder.

When it comes to the purchase of life insurance, the term “premium” represents the total amount of fiat currency and other consideration (excluding interest on policy loans) that are paid in exchange for the issuance of a life insurance policy and the policy benefits. These in-kind or noncash premiums become part of the policy’s cash value within the PPVLI policies. These noncash premiums are invested within the policy and receive the same tax treatment as any other types of assets held within any compliant policy, as recently determined under an IRS private letter ruling nonpublished and of no precedential value.

From a tax perspective, it is important that the investment policy statement within the policy’s investment fund that governs the investment holdings within the policy be sufficiently broad, and that no prior agreement (expressed or implied) exists between the policyholder and his or her investment advisor regarding the continued holding of the contributed assets within the policy investment/ cash value account basket. The key metric is valuation and maintenance of a diversified portfolio of policy investments within the meaning of Section 817(h) of the Code and the applicable Treasury Regulations.

The National Association of Insurance Commissioners (NAIC) follows this long-standing acceptance of in-kind assets for both casualty and life insurance policies, and goes even further, avoiding any specifically enumerated definition of premium and in-kind premiums within their publications and issuances of regulatory guidance.

Following the death of an insured, it’s common for customized PPLI policies to distribute in-kind holdings from the policy cash value as part of the death benefit’s policy death benefits. Once again, there is no prohibition of in-kind death benefits from a life insurance or annuity policy.

Strategy Example

  1. The Facts

Hector, age 45, is a high-net-worth investor who has invested in a dozen pre-IPO companies. He is married and has three children. The total amount of his investments in the portfolio of privately held companies is $2.5 million. The number of companies in the portfolio is 10. The projected valuation of the portfolio making reasonable assumptions following an initial public offering is $60 million. Hector is a resident of California and is in the top marginal tax bracket for federal and state purposes.

  1. Solution

Hector establishes a Spousal Lifetime Access Trust (SLAT) with the Nevada Trust Company. The Trustee is the applicant, owner and beneficiary of a PPLI policy issued by Acme Life and Annuity, a Barbados life insurer. Hector funds the Trust using his exemption equivalent for estate and gift tax purposes, transferring the portfolio to the trust. The policy features a customized investment account managed by Good Investments LLC.

The trustee transfers the portfolio as an in-kind premium based upon an independent valuation. The transfer to Acme Life is treated as a sale or exchange for tax purposes. Any gain is triggered and taxable to the grantor since the trust is a grantor trust for tax purposes. Under the terms of the investment advisory agreement, Good Investments has the legal discretion to buy and sell investments within the policy. Hector and the IDF manager develop a broad investment policy that comports with Hector’s risk level, timing and planning objectives. The IDF manager controls Good Investments’ investment discretion under the investment policy. Hector has no ability to control Good Investments’ investment discretion.

The PPLI marketplace offers HNW investors flexibility and customization that is absent in the retail life insurance market. PPLI is a product offering that features investment customization and institutional pricing. The flexibility to make in-kind premiums is an additional feature that does not exist in the retail life insurance. This planning feature allows a prospective policyholder with the ability to fund a policy with a low basis capital asset that has the potential for substantial capital appreciation within the tax advantaged environment of a PPLI contract. This flexibility should cause HNW investors to evaluate and reconsider their existing life insurance and investment tax planning. Sometimes mixing metaphors, life insurance and tax planning, can be a good thing!

 

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

~ Your best source for PPLI and EWP

Michael Malloy-CLU-TEP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Metaverse PPLI and EWP - 3

The Metaverse – PPLI and EWP – Episode 3

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Transform Your Assets Inside an EWP Metaverse

PPLI Is Your Partner in Creating Financial Strength and Stability

It makes sense to partner with a concept that is recognized as a cornerstone of financial stability—the six principles of Expanded Worldwide Planning, or EWP for short. The six principles are recognized as such by Wikipedia in its article on International Tax Planning. You too can employ these principles to grow and strengthen your own financial assets. How can you accomplish this? By using an asset structure that has at its very roots the six principles of EWP.

The metaverse is a concept that has been thrust into our lives. Is it something new and or just a fad that will die out in a few years? At EWP Financial we are creating our own metaverse that has at its foundation the rock-solid Six Principles of EWP. In this video, through compelling images and concise dialogue, we explain how these Six Principles can create for you a financial future that beneficially transforms your own assets for tax efficiency, privacy, and asset protection.

We continue to bring you relevant articles on the Metaverse. This week we bring you articles from the worlds of sports and gaming; two areas that have been exploring new ways to use the metaverse. These two articles are courtesy of Cointelegraph.

Berlin-based football app enters the metaverse following $300M fundraiser

By Arnold Kirimi

The financing round was led by Liberty City Ventures, with participation from blockchain platforms and venture capital firms, including Animoca Brands and Dapper Labs.

OneFootball, a German football media application, has raised $300 million in a Series D round to grow the company’s presence on Web3 and develop new features on its platform.

According to a Thursday announcement, OneFootball and nonfungible token (NFT)-centric Animoca Brands created a joint venture called OneFootball Labs. The new platform will “enable clubs, leagues, federations and players to provide digital assets and fan-centric experiences based on blockchain technology.” Furthermore, fans will be able to obtain and store virtual collectibles using their email address and credit card.

The financing round was led by Liberty City Ventures, with participation from blockchain platforms and venture capital firms, including Animoca Brands, Dapper Labs, DAH Beteiligungs GmbH, Quiet Capital, RIT Capital Partners, Senator Investment Group, and Alsara Investment Group.

Animoca Brands will provide its expertise and network in blockchain, NFTs, gaming and the metaverse to help OneFootball develop new products and services that will increase digital fandom while generating new income streams for the football industry. In a statement, Lucas von Cranach, founder and CEO of OneFootball, said:

“We believe the future of football away from the stands and off the pitch will be decentralized and built on Web3, giving back the ownership of data and digital assets to the fans.”

Murtaza Akbar, the managing partner at Liberty City Ventures, highlighted OneFootball’s 100 million monthly active users as an opportunity to take advantage of blockchain technology for a massive community of football fans.

Earlier this year, Cointelegraph noted that increasing interactivity and ownership of virtual items are some of the metaverse’s most outstanding features. “OneFootball might be jumping on both opportunities to provide more fans greater access to the “beautiful game.”

Manchester City, the English Premier League champions, announced their entrance into the Metaverse by signing a three-year agreement with Sony to provide virtual reality to professionals for image analysis and skeletal-tracking technology from Hawk-Eye. Neighbours Manchester United have also entered the Web3 ecosystem after a partnership with Tezos, announced on Feb. 10.

The first metaverse designed for non-crypto gamers releases theatrical trailer ahead of launch

By Sarah Jansen

The metaverse is evolving rapidly, increasing the barriers to entry for those without previous crypto knowledge.

The appeal of blockchain-based gaming is clear: participate in activities you might have already been doing and make some money at the same time in a realm constructed by tokenized and tradable items. While attractive in theory, the reality is that these models cater to those with a familiarity with nonfungible tokens (NFTs) and surrounding technologies. Consider that most of these games present a steep learning curve with some knowledge, costs and other setup required before a player can participate in the ecosystem.

Emerging as a low barrier to entry, Bezoge, the first crypto game for non-crypto people, presents Legends of Bezogia with its unique in-game tokenomics and currency. The play-to-earn (P2E) MMORPG game lets players pillage enemy SHIBs and DOGEs to rid the world of fear, uncertainty and doubt (FUD). Following the P2E model, players are invited to select a Bezogi and start their journey into earning blocks and rewards, whilst Bezogi NFT owners can rent or summon additional Bezogi if they already own two.

Where this game differentiates itself from other releases is its design as a mainstream offering that can be played by anyone. To enable this functionality, the game features a fully decentralized NFT rental platform where players can rent NFTs to use in gameplay without collateral or gas fees. Therefore, non-crypto gamers can now participate in Legends of Bezogia as they would in any other free-to-play game, eliminating previously mentioned high barriers to entry.

Bringing this project to life is a team of more than 30 in-house staff who share that the objective of this release is to become “the first crypto game for non-crypto people.”

In alignment with this mission, the team has released a Theatrical Trailer introducing the breeds found in Legends of Bezogia as an introduction to their Alpha signup.

Bigger and better play to earn

Bezogi exists as an NFT, in-game character on the Polygon Blockchain (MATIC) that will also be interoperable across multiple chains in the future. These characters are of one definitive colorway, a trait that is more than just aesthetic and instead holds significant meaning in the Legends of Bezogia due to differing bloodlines. On the surface, these creatures are cute; however, upon taking a deeper dive, every bloodline demonstrates a role as a fearsome warrior.

To illustrate the distinction between each, players are invited into the red corner with a breed of warriors known as the Red Zerkzogi. These warriors are covered in blood yet remain well-groomed and obedient. This group often has an arsenal of impressive weapons at their call, making them known killers. The red warriors are joined by the Yellow Speedzogi, recognized as being the fastest life-form in Bezogia, obsessed with gathering blocks and scavenging loot.

Continuing the introductions, players will meet the Blue Shieldzogi, a protector of Bezogia, the White Holyzogi, a keeper of the sacred Recovery Seed and the Green Freezogi, a frozen Bezogi that enjoys the thrill of a kill but is hooked on noxious gases. The final three spots are made up of the Orange Fudzogi, a group of meddling tricksters, a Black Darkzogi that burns blocks to summon new Bezogi, and the Golden Mintzogi, who run the lands of Bezogia and now command great respect and power.

With each Bezogi exhibiting a different set of skills, players are encouraged to carefully consider the space where each operates in the greater ecosystem. After deciding, interested parties can find Bezogi and Petzogi for purchase on the OpenSea platform.

30,000 holders and growing

The team shares that their efforts in P2E gameplay have resulted in 30,000 meme coin holders, alongside a Metaweek Gold, RBK Promotions Boxing Gala and the Dubai Soccer Award Gold Sponsorships. Furthermore, Bezoge has also begun pursuing influencer partnerships with those who have millions of followers. This effort will be followed by a series of guild partnerships that are still in progress.

With several other developments underway, the team continues to hold weekly AMA updates, providing additional detail about the latest developments. The intent is to attract gamers from all walks of life to a constantly changing digital construct the world recognizes as the metaverse.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

In our next video, we will reveal the financial tool that makes an EWP asset structure possible. Thank you for watching and hope you will join us for episode four in our Metaverse Series.

by Michael Malloy, CLU TEP RFC.
CEO, Founder @EWP Financial

Michael Malloy-CLU-TEP