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Special Estate Planning Needs, Markets, & Opportunities

This Action Assignment includes as exercise that will strengthen your understanding of, and appreciation for, advanced estate planning opportunities. When completed, be prepared to review this with your General Agent or trainer.

  1. All the following organizations are likely to qualify for charitable giving tax treatment, EXCEPT:

    1. The American Legion
      2.

    2. The American Red Cross

    3. The Town's Local Public Hospital

    4. One's Local Church or Temple

  2. Which of the following statements regarding the role of life insurance in charitable giving programs are correct?

    1. Life insurance can help a charitable organization take a long-term planning view towards its fund raising efforts.

    2. To qualify for a tax deduction for life insurance premiums paid, a donor should own the policy but send the premium payment to the charity.

    3. Contributing to a charity through deductible life insurance premium payments substantially leverages the ultimate value of the gift to the charity.

    4. Because the insurance proceeds avoid probate, a donor's gift of life insurance to a charity avoids unwanted publicity.

    1. I, II, & III Only

    2. II, III, & IV Only

    3. I, III, & IV Only

    4. II & III Only

  3. All the following are generally regarded as ideal goals for a family business succession plan, EXCEPT:

    1. The founder will groom a successor (family member) early in his or her career with the business.
      2.

    2. The founder will make public the name of the chosen successor as early as possible.

    3. The founder will try and equalize the value of inheritances given to his or her children, but not split up the business for this purpose.

    4. The founder will retire at a predetermined age, at which point he or she will assume a managerial role in business operations.

  4. When life insurance is used for "inheritance equalization" purposes between children who will be active in the family business and those who will remain inactive in it, the best way to set up the plan is to:

    1. Have the founder own the policy and designate each inactive child as an equal share beneficiary.
      2.

    2. Have one of the inactive children own the policy and be its sole beneficiary, with instructions to distribute proceeds as needed to "equalize" the inheritance.

    3. Have the active child own the policy and be its sole beneficiary, with instructions to distribute proceeds as needed to "equalize" the inheritance with the other family members.

    4. Have an irrevocable life insurance trust own the policy, with the trustee instructed to finesse the distribution to each child as necessary equalize the value of each child's inheritance.

  5. Which of the following option best defines a "stretch IRA?"

    1. A stretch IRA is a special type of deferred annuity product that is used to circumvent IRS minimum distribution rules to preserve the value of an IRA for the benefit of future generations.
      2.

    2. A stretch IRA is a special type of permanent life insurance product that qualifies for IRA rollover use and lets an IRA owner convert his or her qualified assets into tax-free death benefit proceeds for the benefit of heirs.

    3. A stretch IRA is a concept that extends the distribution period over which mandatory IRA distributions must be made by minimizing the amount of current distributions and preserving as much as possible for the benefit of children and grandchildren.

    4. A stretch IRA is a concept that substantially reduces the minimum distribution amount by letting the IRA owner calculate the minimum annual distribution on the life expectancy of the youngest beneficiary, thus preserving assets for the benefit of children and grandchildren.

    Field Exercise

    It is recommended that you use a notepad to record notes of your responses to the following field exercise.

    1. Read the brochure Charitable Giving Client Guide (Form 2502) from Ohio National. Then, make a list of five charitable organizations with which you are personally familiar and which could possibly become the basis of your charitable giving planning practice. Meet with your General Agent/Trainer to discuss and review the following topics:

      • With which of the five charitable organizations you've listed do you have a personal contact or center of influence that could introduce you to key people in the organization (e.g., the development director)? Write down those individuals' names and contact information.

      • With which of the five charitable organizations you've listed do you currently have clients who are members of the organization? Write down those individuals' names and contact information?

      • Prepare a simple plan to approach either the contacts, centers of influence, or clients who are members of a charitable organization and explain the role you can play in a charitable giving program.

    2. Read the brochure Family Business Succession Planning Brochure (Form 2304) from Ohio National. Then, make a list of all your current business clients who own a family business. If you are new to the business of life insurance and do not have clients who are businessowners, then make a list of five businesses in your community that you might approach for a discussion of their insurance needs. Meet with your General Agent/Trainer to discuss and review the following topics:

      • How might you approach your existing businessowner clients to raise the discussion of family business succession planning? Alternatively, how might you approach prospective businessowner clients to discuss their business insurance needs? In the later case, would it make sense to lead your approach with the topic of business succession planning?

      • Prepare a simple plan to approach either the current or prospective businessowner clients identified in this exercise to discuss their family business succession plan.

    3. Read the Stretch IRA Brochure (Form 8946) from Ohio National. In particular, read the topic titled "Separating your account" on the last page, and study the example presented (one IRA account vs. Account Separation). Meet with your General Agent/Trainer and explain why the "account separation" approach yields a much greater total distribution than the "one IRA account" approach.

    Please print this Action Assignment using the "Printer Friendly" button at the top of this page. Once it is complete, sign it and submit it to your General Agent for his or her signature. Give one signed copy to the General Agent and fax/send another copy to Field Development Operations at the corporate headquarters — (513) 794-4515.

    Unit XXII: Estate Planning Section VI
    Action Assignment Satisfactorily Completed

    DATE: __________

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