X-Message-Number: 12410
From: 
Date: Mon, 13 Sep 1999 00:32:54 EDT
Subject: Re: CryoNet #12397 - #12402

In a message dated 09/12/1999 5:04:01 AM Eastern Daylight Time, 
 writes:
Actually, John D. writes:
<< 
 >  Only life insurance creates an "Instant, tax free, creditor  proof
 estate".
 
 Surely life insurance has to be written in trust to achieve this effect, so
 the trust is the policy owner. If the insured is the policy owner, then the
 proceeds (if any) pass to his estate in the usual way. Of course almost all
 life policies are written in trust for this reason.
 
 Therefore any assets, such as a holding in a mutual fund, could have exactly
 the same benefits if held in the same form of trust.
 
 The advantages of doing this is that there are no costs for the risk, and
 "eccentric" investments (such as technology stocks) can be subject of the
 mutual fund.
 
 I would be interested in Mr Hoffmann's and any other comments on this
 observation.
  >>


Hello, John and anyone else interested, this is Rudi Hoffman writing.
Actually, John, I can only comment about United States laws...yours may be 
different in GB. 

And in the US, life insurance proceeds are generally "creditor proof".  And 
tax free.  
The reason is that life insurance proceeds, like annuity proceeds, have 
specified beneficiaries and consequently avoid the probate process. 

Life insurance, (unlike annuity contracts) are also exempt from federal and 
state taxes.  They ARE, however, subject to estate taxes unless they are 
owned by a spouse, family member, or trust.  In estate tax situations, the 
insurance is typically owned by a "Irrevocable Life Insurance Trust" , but 
this is not necessary for the policy to do what I explained above. 

I do not mean to sound overly didactic or lecturing on this subject.  Nor do 
I wish to clutter up cryonet with more detail than necessary.

But mutual funds, in a trust or not, do not create the "instant" estate that 
life insurance does.  Although I love mutual funds!  Own 'em and sell 'em.

Thanks for your interest!
Rudi Hoffman

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