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

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















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

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 EWP Stories Video Series – CRYPTO-PPLI and EWP – Episode 1

Cryptocurrency, Private Placement Life Insurance and Expanded Worldwide Planning

The EWP Stories Video Series

Video 1

Celebrating a happy ending and a new great  beginning we want to introduce you to a fresh Video Series

Welcome. The blockchain concept has given birth to crypto currencies. This is a relatively new phenomena in our lives. Yet taxes have been with us since early dynastic Egypt and probably before. Recently passed tax legislation in the U.S. is a cause of concern for all those who hold crypto currencies. Similar laws are being passed by governments throughout the world. For this recent U.S. tax legislation, we include below excerpts from Robert W. Wood’s excellent article in the Cointelegraph.

What most of you don’t know is that there is a simple and straightforward solution to these new taxes that has existed since the 1980s. The beauty of this solution is that it is asset neutral, meaning even though crypto currencies are a new asset class, this solution wholeheartedly welcomes crypto currencies. For this solution, crypto currencies are handled the same as any common asset class like stocks, bonds, and real estate.

What is this simple and straightforward solution to the grave tax problem that is facing crypto currencies: Private Placement Life Insurance, or PPLI for short. But not just any PPLI policy. The solution is a PPLI policy that is structured to embody the six principles of Expanded Worldwide Planning, or EWP for short. Our firm, EWP Financial, was an early adopter of this powerful yet conservation asset structure.

This series of videos will give you the basic principles of a properly designed EWP asset structure. An EWP asset structure is the perfect solution to the recently introduced tax legislation in the United States that threatens to wipe out a good portion of your gains in crypto currencies. An EWP asset structure is equally effective if you are a tax payer in a country outside the U.S. In this video, Part One, we introduce you to EWP Financial and our unique approach to asset structuring.

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

Michael Malloy-CLU-TEP