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Wealth Planning Suite. Discussion. Calculations. Example: 12% entered would be 1% per month compounding to 12.6825 in one year. Calculations. * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R) 1/12 – 1.
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Wealth Planning Suite Discussion
Calculations Example: 12% entered would be 1% per month compounding to 12.6825 in one year
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1 Example: 12% entered it is compounded monthly at 0.948879%
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1 Example: 12% entered it is compounded monthly at 0.948879%
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1 Calculated each month on beginning of year value Effectively – Reinvested Dividends work exactly the same as Growth
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1 Calculated each month on beginning of year value Effectively –Dividends work exactly the same as Growth
Calculations * Monthly compound rate (R) to produce effective annual rate (EAR) entered EAR = (1+R)1/12 – 1
Trust Accounting • Current • New trust assumed to start and have anniversary date the same as the date of the proposal • All ledgers show end-of-year values • Unitrusts percentage payouts based on end-of-year trust value • Ledger values show portions of two trust years • Solution: • Change calculations • Improve footnotes and messaging
Changes if no calculations changes ------ 1 2 3 4 ------
FLP Distributions • Current • “FLPs and Defective Trust” • All income distributed • Trust needs distributions for premiums and loan payments • Trust does not distribute its remaining income • All other FLPs • Assumes FLP does not distribute any income • Additional Problem • FLP only allows income as a percentage • Hard to match when rental or business put in FLP
Pension Protection Act (PPA) and IRC 101 • Employee’s prior notification and consent required PRIOR to issuance of BOLI • Company “policing”? • How broadly interpreted? • Stephan Leimberg’s – very • Suggested wording in Assumptions or Important Notice to save some customization: Insurance death proceeds are generally received income tax free [IRC § 101 (a)]. For employer-owned life insurance policies issued after August 17, 2006, IRC § 101 (j) provides that death proceeds will be subject to income tax; however, where specific employee notice and consent requirements are met, and certain safe harbor exceptions apply, death proceeds can be received income tax free under IRC § 101 (a).
References to NASD • Now that NASD and NYSE have merged to form FINRA • Regulations still refer to “NASD Rules and Regulations” and NYSE Regulations • New members are referred to as FINRA and are subject to NASD Rules and Regulations if not also a member of NYSE • FINRA rules refer to • “prior NASD only members” • “both NASD and NYSE members” • “NYSE only members” • Consensus Needed • Should references be changed throughout products • Continue referring to NASD
State Inheritance and Estate Taxes • Many states have and are changing due to the elimination of the federal credit for state inheritance and estate taxes • Calculations are updated as we receive notices – each new release has the most up-to-date at time of beta • ***Uses state on Estate Tax tab in Assumptions*** • Calculations are identified where possible for state rates • State rates applied to “federal” amounts • No split states (additional expenses or taxes can be used) • Some states require additional beneficiary information • Percentage to each class & # in class • State Death Taxes page conditional by state for proposed scenario Recent Changes: Kansas Repeal effective 1-1-2010 (graduated step down 2007—09 Implemented in 2006R2 Substantial Changes or Repeal: Arizona 2006 Arkansas 1-1-2006 Louisiana 1-1-2008 Nebraska 1-1-2007 Virginia 7-1-2007
ETA’s Relationships within Initial Graphics The Calculus of PlanLab and ETA
Multiple Changes – Changes behind the Scenes • Desire to make one change and have it applied to all similar items • Impact tries to not make changes – to actual entries – behind the scenes • Must be considered on very specific items
Living Trusts – Specifying Assets • Now – assumes all probate-able assets included • Additional reporting required if individually selected • Would specifying specific assets to be placed in the trust constitute practicing law?
SuperLedger – Multiple Scenarios • Each scenario available • Each separately calculated module available
Page Numbering Option • Renewed requests from banks, RIAs, non-insurance related firms to make page numbering an option • Is this still a compliance concern?