Year-End Planning Suggestions

Year-End Planning Suggestions

Year-End Planning Suggestions

It’s nearing the end of the year and with the recent market drops and volatility getting your clients worried, we have some year-end planning suggestions that can be win-win’s.

We can help with innovative planning strategies that can protect your clients’ assets, while still allowing them access to these assets.  This can also better prepare them for their planning needs in 2019.


  • When asset values drop, suggest that your clients consider making gifts of these “beat up” assets to their children, grandchildren or a trust for their benefit at this reduced value.  When those assets rebound, the growth will then be in the hands of those who received the gift and that growth will be gift and estate tax-free.
  • Does your client not want to give the asset away because there may be a need for it later?  He or she may be able to make a gift of these “undervalued” assets to a specialized family trust that could provide income and/or principal to the husband or wife during their lifetime but be removed from their estates for estate tax purposes.
  • Also, gifts of these assets can be given upstream from an adult child to a parent to help support them. The parent could will these assets back and when they do the assets will get a stepped-up basis if certain timelines are met.
  • Transfers to GRAT’s and other estate planning vehicles can be incredibly powerful when assets that are currently undervalued are used.  All future appreciation occurs off the client’s balance sheet, can be asset protected and ultimately delivered to future generations gift tax-free.

Contact us for help getting started with any of these strategies, so that we can help you ease your client’s mind and help them continue along the path to achieving their financial goals, even while the market is down.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.

Retirement Vehicle of the Fortune 500: Deferred Compensation Plans

Retirement Vehicle of the Fortune 500: Deferred Compensation Plans

Years ago I saw an eye-catching financial stat, oddly enough, in a Physician’s magazine.  The stat was in an article promoting the use of “deferred comp” plans for doctors.  In essence, the article was imploring physicians to use the very same retirement vehicle the Fortune 500 use for their senior executives: deferred compensation plans.

The specific stat said that 86% of Fortune 500 companies have a deferred comp plan (NQDC) and that a whopping 98% of those plans use a specific type of life insurance.  That may elicit a big, “Huh?” from many, but it didn’t surprise me at all. Why? Because I knew the Fortune 500 had long ago done their homework and determined that insurance was far and away the most efficient and effective tool to use for retirement planning.  It is the only asset that can provide:

  • Tax-deferred growth
  • Possible tax-free income
  • Tax-free benefits when the person passes away

No other asset offers this!

The KEY, and this is critical.

The key is to design the Plan so that it uses the minimum amount of insurance allowed.  That way, only a very small piece of the annual contribution goes toward the cost of insurance.  The rest grows tax-deferred and then later can come out tax-free.

The article was, therefore, imploring doctors to use this exact same strategy for themselves.  Set up their own.  We call these Personal Retirement Plans, PRP®’s.  PRP®’s are not bound by ERISA regs, so they can design the PRP® any way that they want.  They can exclude who they want from it and even implement a PRP® just for themselves.

Fast forward to the recent Forbes article, “The Rich Man’s Roth” and you can see that anyone can have the same chassis and engine that the Fortune 500 uses.  Subsequently, we have seen an explosion in the PRP® space with clients taking advantage of this powerful tool to drive their own tax-free income stream.

Like all things, it doesn’t work for everyone.  It’s my opinion that if someone has less than 9 years or so to retirement, this likely isn’t the train to get you there.  But if a person has at least 10 years to go, can contribute at least $25K/yr, they will find this asset is a very powerful tool that can drive tax-free income.   A CPA friend of mine put it like this: that’s income that will never see a tax return.  This means it is income that will not drive the client into a higher tax bracket in their retirement years and will not affect their Social Security etc.

The Rich Man’s Roth, as Forbes called it, is pretty accurate because like a Roth, this will drive tax free income.  But unlike a Roth, a PRP® has NO contribution limits.

So, ask yourself, “Which of my clients would benefit from this great strategy?” Fill out our contact form for help getting started.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.



In case you missed it:

.Here is a recent success story utilizing this Plan:



Want more information? Here is a video we created on Personal Retirement Plans, PRP®’s




Planning in 2018: Now What?

Planning in 2018: Now What?

The tax law passed at the very end of 2017 has left many clients and advisors wondering about current estate planning needs:

  • Now what?
  • Does it affect me?
  • Do I need to take action regarding my planning?

The short answer is – probably!

We work with wonderful clients who think that once we’ve helped them craft their plan to achieve their dreams, they can just put that plan in a drawer and forget about it.  We always urge them to keep it handy.  As the world changes, their needs will change and therefore their goals will change.  Their plan is not meant to be “one and done.”  Think of it like a living document.

And, amazingly, a vast majority of high net worth clients have not done as much planning as you’d expect. Outside of a will, or maybe some basic living trust, they’ve gone no further.  And worse, even that limited planning likely hasn’t been updated in years!

Why is that a problem?  Well, does it take into account the huge changes one can leave their surviving spouse?

A quick illustration of where a review can change everything:

For many years, wills were written to say: “I want to leave the maximum amount allowed by law to my spouse to be placed in a Credit Shelter Trust.”  Sounds great right?  Well, the amount one can leave has gone up over the years from $600,000 to $1,000,000 to $3.5MM to over $5MM to now over $11 million.

So, what if their estate is worth $7 million?  Based on the above-outdated language, the will directs that the maximum amount allowed by law be passed to the spouse in that Trust….But wait.  That means their entire $7MM estate will be placed in Trust since the current law allows for up to $11.18MM.

Is that what you wanted??  Very likely not. It was likely written when the exemption amount was only $1 million, or even $600K.

Point of all this is that planning is critical. Planning brings peace of mind. Planning allows YOU to achieve your dreams.  It’s your plan.  You can design it any way you like. The key is to do the planning!

And that’s where we come in to help! Are you ready to review your client’s current plans and make sure they are up to date and still working towards their goals?  Have your clients done enough planning thus far?  Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.

Estate Planning and The Forgotten Client

Estate Planning and The Forgotten Client

Estate Planning and The Forgotten Client

Over the past several years we’ve seen the estate tax exemptions jump from $1 million per person to now, temporarily, over $11 million per person.  Consequently, many estate planners have seen their practices scale back significantly because these larger exemptions translate to fewer people needing to do traditional estate planning.

But, that doesn’t mean these clients still don’t need planning of some sort.

Because of these exemptions increasing, we’ve seen clients with net worth’s in the $3 million to approximately $8 million range being left on the planning sidelines.  And yet, these clients need and deserve attention as much as any other clients.

In fact, it’s often these clients who are quite fearful of outliving their retirement nest egg and/or not being able to leave some sort of legacy.  Furthermore, they have grave concerns about the cost of care as they grow older.  Long-term care is front of mind for these clients.

Because of these fears, they end up not being able to enjoy their retirement for fear they will either run out of money or will spend it all on long-term care, essentially wiping out any chance of leaving a legacy.

Thankfully, there is a solution.

The Legacy Wealth approach solves all of these needs by providing financial security to these clients and to their heirs. How does it work?

Very simply, we reposition assets to acquire a life insurance asset for the benefit of both the clients AND the heirs.  It benefits the clients today because we design the coverage so that it provides ample LTC coverage, as well as a tax-free benefit to the heirs when the clients pass away. The insurance can be trust owned or owned individually.

The funding of the insurance is quite flexible. It can be paid in 1 lump sum or paid over 5, 10, or 20 years or even for a lifetime.  There are inherent advantages and disadvantages as to how long to fund, which can be addressed with each client.  But the end result is that funding the insurance asset does not impede on their lifestyle in retirement.

So, in the end, we have provided a substantial legacy to the heirs no matter how small the nest egg may have shrunk to at the client’s passing.  We have secured vital long-term care coverage for the clients so they can rest assured the cost of care will not bleed down their assets.  And, maybe most importantly, we have given the client’s peace of mind to know they can truly enjoy their retirement years without worry.  And that benefit clients tell us – is priceless.

The image below illustrates just how much life insurance can impact your net worth and preserve your legacy.  Click the button below, to see the details of how we arrived at this comparison.

Are you ready to discuss solutions and re-engage your “forgotten clients”? Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.

Importance of Policy Analysis

Importance of Policy Analysis

3 Reasons to Do A Policy Analysis

That You Likely Have Never Been Told

1. Almost 2 in 5 policies are “orphaned”. This means they have no one watching over their performance. This is dangerous because life insurance is an asset that needs managing, just like any other asset. Without proper management a policy could lapse, wiping away thousands of dollars of cash value and possibly millions in coverage for loved ones.

2. 1 in 5 policies is on “automatic premium loan”.
What is that? That’s a feature ostensibly designed to be helpful but can inadvertently cause a taxable event for your client. If a client misses a premium payment on a policy with the automatic premium loan, it will kick in taking a loan for the premium due from the cash value. This is fine until the policy lapses and the entire loan amount becomes taxable to the client. OUCH!

The potential liability that the Policy is either underwater or due to lapse: studies show as many as 45% of policies are underperforming or scheduled to lapse. This could be a huge problem for your clients and they don’t even know.


But don’t fret. We can help you and your clients. However, the key is to act NOW vs. waiting. A troubled policy doesn’t get better, it only gets worse. Give us a call to discuss how we can help analyze your client’s coverage to ensure they’re on solid ground.

Are you ready to discuss solutions and re-engage your clients? Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.



And now we take action, right?  What am I talking about?   I’m talking about (finally) taking action on your planning.
For the past 2 years we’ve heard countless clients say, “Hey, I get it. I know I need to do my estate planning but I’m not doing anything until I see what the tax law will be.”  Well, now we know.

What we know is:  the estate tax did not go away. 

So, even with a Republican-controlled House, Senate, and White House the estate tax still did not get repealed.  Most experts agree, given those circumstances, that this was the best chance of ever getting it repealed.  These same experts now agree, that the tax is HIGHLY likely to be with us for a long time given the above.

So, what does this all mean?

Most estate planning attorneys agree that life insurance is an effective part of any quality estate plan.  Generally, the insurance is used as a very efficient means to pay the estate tax.  Think, paying it with pennies, not dollars.  Clients who have been presented insurance as part of their plan, but who held off waiting out the tax law change, now need to move forward.  As we all know, insurance does not get cheaper as you age.  So, the time to act on this really is now.

Some good news: although the estate tax did not go away, we were given a window to do some very exciting things that we won’t be able to do in just a few short years.  The tax act gave us double the gift exemption.  So, instead of $5.49 million to gift per person, we now have close to $11 million to gift.  However, this window closes in 8 years, if not sooner.  Therefore, most planners, attorneys, and ourselves included are urging clients to take advantage of this incredible gifting opportunity by taking action now!

On top of that, the rates the IRS publishes for planners to use with various trusts, GRATS, CRT’s etc. are slowly rising.  These rates have been at historic lows for almost a decade.  That window seems to be closing as the experts predicted and these interest rates will continue to rise making planning strategies that use these rates less attractive.  Said another way:  Time is running out.

Next Steps? 

Your next step is to go back to every client who has been sitting on their hands these past 2 years and re-engage them.  Your Mercury Planning Specialist is here, as your go-to planning partner, to help guide you and your clients on the proper path to accomplish all their goals.

Further Reading – The Power of Life Insurance: The Impact of a Tax-free Death Benefit

Are you ready to discuss solutions and re-engage your clients? Fill out our contact form.

Mercury Financial Group does not provide tax or legal advice. All clients are urged to seek counsel on such matters.