Protect Your Assests

How much thought is given to retirement?

When dealing with retirement, most Americans usually consider the conventional retirement plans, such as IRA’s, 401ks, Roth IRAs, etc. They focus on receiving an additional source of income once they retire, knowing that they cannot live on social security alone.
But what about an accident that ends one’s life? Do you know what happens to your retirement plan? Worse yet, what happens if the married couple lose their lives simultaneously? What happens to the retirement plan? I’ll tell you. If you do not have a will – trust, it goes to “PROBATE”.
If there is no will, the court will appoint an administrator as a personal representative to collect the assets, pay the debts and expenses (court and attorney fees – 1% to 6% of the estate’s market value) and then the remainder of the estate is distributed to the beneficiaries. This can take from 9 months to 1 ½ years.
According to a Caring.com survey, only 42% of US adults currently have estate planning documents, such as a will or living trust. For those with children under 18, the figure is even lower, with just 36% having an end-of-life plan in place. In a Harris Poll the amount is greater, 64% of Americans do not have a will.

Why is it so important to have a Trust?

Aside from avoiding probate, a trust becomes part of the estate plan, which will establish the following:

  • Designated beneficiary(s)
  • You control how your assets are distributed
  • Medical and financial powers of attorney
  • If children are involved, the Trust names the guardian(s)
  • If substantial wealth is involved, you may need one or more trusts to help control how your assets are taxed, managed and distributed

There are many types of trusts. To find out which one fits your needs, fill out the questionnaire located in appendix “A” so that our in-house estate planning attorney can help you decide what type of trust is best for you or if more than one trusts is recommended.

How can you protect the future of your loved ones

As we indicated above, most Americans have contributed to a retirement plan. But what about the future of the family members? Life insurance is a critical component of estate planning. The primary reasons to consider buying life insurance are:

  • Income replacement: This can be a vital resource for your loved ones to help replace your income, pay off the mortgage to your home or fund your children’s education in the event of death.
  • Terminal illness: Some policies allow you to access a percentage of policy benefit should you become terminally ill.
  • Long Term care (LCT): As Americans are living longer, they are finding that they require long term care which is very costly.
  • Estate Taxes: Insurance proceeds can provide proceeds to pay estate taxes. This is an item that can be overcome once the begin the estate planning process.
  • Business owners: Life insurance proceeds can be used to pay down business loans, provide financial stability, death of a key employee or secure cash to fund a buyout by a surviving owner.

I am currently working with a boutique financial group out of Arizona that offers life, health and annuities to fit your specific needs. I want to share a specific product that I believe is worth considering for your estate. It is called the Life Insurance Retirement Plan.

1) The Life Insurance Retirement Plan (LIRP):

LIRP is a life insurance plan specifically designated to maximize the accumulation of cash within the policy’s growth account.
No contribution limits
No income limits
No legislative risk

It has Multiple Accumulation Strategies:
Insurance Company Investment Portfolio – conservative, but very consistent
Stock Market – pass contributions through insurance companies into mutual fund portfolios called sub-accounts
Index -Growth linked to the stock market S&P 500. Capped rates between 13% to 15% if the index loses money, the account is credited zero, it never goes down in value
Historical returns are between 7% to 9%.

2) Life Insurance as Long-Term Care (LTC):

– Do not have to worry about the rising cost of premiums, or the notion “using it, or lose it.” Contrary to traditional LTC.
– When LIRP is used to cover LTC risks, they still pay for it, but if they die never having used it, their heirs still receive a tax-free death benefit.
Let’s discuss the option. Simply fill out the Life Insurance Form found in appendix!!!

Why haven’t we heard of a LIRP?
Historically, LIRP has been reserved for the wealthy. It is estimated that 85% of the CEOs of Fortune 500 companies use it as do members of Congress. It wasn’t until recently that companies began to re-engineer these programs to mimic the Roth IRA. They captured the low-cost maintenance with the tax-free benefits of a Roth IRA. (See appendix “” for more details)

3) Qualified Retirement Rest (QRR)

If you ask any deferred qualified retirement plan owner how much they have in their IRA, they will always tell you the total amount reported in their earnings statement. But is that true? No, the real value of your account could be 20% to 40% less than you expect.

Converts your qualified dollars:
• Into tax free dollars
• While also protecting your money from the downside risks of the market.

How it works: Systematically transfer IRA assets to cash accumulation life insurance over 3 to 5 years. Taxes are paid internally by participating interest policy loans.

Results in:
• Tax-free guaranteed retirement income
• Tax-free long-term care coverage
• Tax-free legacy/wealth transfer

The QRR is worth considering, simply ask for a personalized illustration.(See appendix !!! for a sample illustration)

4) Annuities:

We also offer a vast array of annuities. Here are the two most common:

• Variable Annuity ties the investment to non-guaranteed equity markets in order to provide higher returns in an attempt to hedge inflation over time.

• Single (Lump Sum) Premium Payment – The most common premium option is the single, lump-sum option. This single payment is invested by the contract owner initially, and continues to grow as the insurer reinvests the annual earned interest back into the annuity.

• Single Premium Immediate Annuity (SPIA) – Designed as a means of spreading out a lump-sum of money over a specified period. An Immediate Annuity begins to distribute funds immediately after the first payment period (depending on payment frequency: monthly, quarterly, semi-annual, or annual), and is used when a single, lump-sum premium is deposited by the contract owner with the intent of distributing it over a specified period of time.

What if you already have Life Insurance?

Many high net worth individuals already have life insurance policies. They are more concerned with greater asset protection and flexibility within their plans. For those individuals, we offer the Protected Savings plan: An alternative, Asset Protected, Tax Advantaged Retirement Plan.


The Protected Savings Plan – creditor protection. Among the benefits you will realize are the following:

• Assets held within the plan are creditor protected by California Statutory law even if your residency is in another state
• Assets may be protected from business and personal creditors, including bankruptcy
• Distributions from the plan are exempt from levy except for child and spousal support obligations
• Assets purchased by the client using Protected Retirement Plan distributions are exempt from creditors provided the payments are traceable back to the plan trust
• You can contribute virtually any amount to the Trust Plan even if you currently participate in a qualified retirement plan
• When you fund the Trust with life insurance, the assets grow tax free
• You can select the type of benefits provided through flexible funding options
• Heirs can receive the death benefit proceed income and estate tax free, provided the Trust is structured properly

In addition, the Protected Savings Plan exempts up to $1 million from the bankruptcy estate for IRAs.

Who Is a Good Candidate

A protected Savings Plan is a specifically designed, non-qualified, savings trust established by an employer for use by the employee (employee may own the business).

• Entrepreneurs and businesses with “inherent risks” such as
• Individuals with income above $170,000 who could not otherwise use a Roth IRA
• Business owners who cannot fully insure business or personal risks
• Individuals looking for non-qualified supplements to qualified plans

Benefits of the Plan:

• No limits as to the amounts that can be places in the Plan
• No limitations as to use, such as with ROTH IRAs, qualified plans or other retirement vehicles
• Plans can be customized
• Plans can be self-directed
• No penalties for early withdrawal
• Plans can discriminate
• Plans can grow tax free and distributed tax free

The Protected Savings Plan requires:

• Must be used primarily for retirement savings
• Funds are periodically placed into the Plan on an after-tax basis
• The Savings Plan is protected from creditors under California law
• Life insurance is used to fund and income distributions are tax free
• Can be used to pay medical and disability expenses
• Not under ERISA (Employee Retirement Income Security Act) rules
• Retirement plan completes in the event of premature death

For more information please go to Appendix ? where you will find all of the information you need to make an intelligent decision.

Qualified Retirement Conversion Strategy (QRC):

This is a solution which can significantly reduce the tax impact on qualified plans. The QRC uses qualified retirement dollars and repositions them in a way to provide tax free income and/or tax free legacy/wealth. It also:

• Removes pre-tax assets locked in a qualified plan tax free via a sale
• Repositions additional assets (outside the plan) into a more favorable tax position
• Dramatically increases your after-tax retirement income and/or the wealth that can be passed on to the next generation(s) utilizing dollars inside and outside the qualified plan

The ideal QRC candidate:

• Qualified plan assets of $1,000,000 (500k) plus, ages 50-75
• A total net worth of $5,000,000 plus (net worth over 2 million can also be considered)

Premium Financing

For many high net worth individuals, life insurance can offer numerous benefits, including the potential for a tax-free death benefit that can protect loved ones from bearing a large financial burden.

The favorable tax treatment also means life insurance can be used for estate planning or business succession planning. However, life insurance policies with sizeable premiums can create liquidity issues.

Borrowing strategically, as part of your comprehensive wealth plan can align with your financial goals. Life insurance premium financing can help preserve your current standard of living since you do not have to access your cash flow to make large premium payments.

Additionally, life insurance premium financing may provide a tax-free benefit that is not included in your estate and further protect your net worth by facilitating a transition of financial legacy to future heirs.

Finally, by leveraging your assets, the earnings potential can increase income approximately 3 times.


If you have a qualified tax deferred retirement plan, you may need to factor in the inherent tax liabilities that will have to be paid when distributions are made.

In addition, you should also consider the options of having a policy pay these taxes and retain the original face value of the plan which will be distributed tax-free.

After considering the options listed above, now we can discuss the viable option by use of trusts in estate planning. The estate will be asset/creditor protection, free of estate taxes and clear as to the estates beneficiaries.

Our goal is to present our clients with retirement option that benefit them and their estate as well as their heirs. Even if you have a life insurance policy, it is worth making sure that it will provide the benefits that you believe it will provide.

Give us a call!!



Jose Mendoza, CPA

Dynamic, result-driven management style with excellent presentation and public speaking skills. Over 30 years combined CPA experience in Public, Corporate and Private Sector. Maximize tax savings after review of all clients’ entities by assuring that all customary, ordinary, reasonable and necessary expenses are considered before tax filings.

Provide a very high and sophisticated level of business and tax advice with a focus on asset protection, estate planning, pension plans and the value of trusts, complex to Grantor trusts.

Proven leadership in a team environment on corporate, partnership and individual tax matters, planning, and other special projects, including the determination of estimated taxes, future tax assets, and liabilities for financial reporting purposes. In-depth understanding of current tax law with a proactive/analytical benefit in tax preparation

Work closely with clients under IRS/State audits that have complex issues and guide them to a beneficial resolution – represented over 100 clients with successful results.

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Client Relations

Olivia Hoge

From working at the prestigious Lee, Wooden & Ziegler LLP to opening her own practice in 2001, Angeline has represented Arts & Entertainment clients large and small for nearly 20 years. She made headlines in 2010 when she secured the “Kingston Woman” rights to songwriter Helen Jones and continues to provide the same dedication to all her clients. Practicing since the first internet boom, Angeline has hands-on experience with how technology affects the creative industry. Staying ahead of the law’s frequent changes is Angeline’s sixth sense.