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TIP-OFF TO SALES. Foreign Nationals Planning: Making it Simple for Producers. James Hahn Vice President, Sales. 2010 Transamerica Producer Road Shows. TIP-OFF TO SALES. Foreign Nationals Planning: Making it Simple for Producers. Andrea Valdez-Brandon, J.D. CLU - PowerPoint PPT Presentation
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For producer use only. Not for distribution to the public.
Foreign Nationals Planning: Making it Simple for Producers
James HahnVice President, Sales
TIP-OFF TO SALES
For producer use only. Not for distribution to the public. 2
2010 Transamerica Producer Road Shows
Resources for Life:Approaching Clients and seizing Opportunities in Today's Market
CharlotteSeptember 15Charlotte Marriott South Park
Kansas CitySeptember 29Marriott Country Club Plaza
ChicagoOctober 14Westin O'Hare
PhoenixSeptember 16Scottsdale Plaza
HartfordOctober 12Hartford Marriott Farmington
IrvineOctober 26Location TBD
Ft. LauderdaleSeptember 28Westin Fort Lauderdale
PhiladelphiaOctober 13Crowne Plaza Hotel
SeattleOctober 27Seattle Marriott Waterfront
For producer use only. Not for distribution to the public.
Foreign Nationals Planning: Making it Simple for Producers
Andrea Valdez-Brandon, J.D. CLUAdvanced Marketing Consultant
Vicki GarrettSenior Underwriting Consultant, International Underwriting
TIP-OFF TO SALES
For producer use only. Not for distribution to the public.
Importance of Estate Planning for Foreign Individuals
Expanding global economy
Need for planning
Impact of U.S. transfer taxes
For producer use only. Not for distribution to the public.
Defining the Market
Metropolitan Area % of Population that is Foreign Born
Total USA 12.4%
Miami-Fort Lauderdale-Pompano Beach, FL 36.9%
Dallas-Fort Worth-Arlington, TX 17.7%
San Diego-Carlsbad-San Marcos, CA 23.0%
Los Angeles-Long Beach-Santa Ana, CA 34.6%
*The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth.This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions).
Source: U.S. Census Bureau, 2005-2007 American Community Survey
For producer use only. Not for distribution to the public.
Survey Question Asked % Who Answered Yes
Before emigrating to the U.S. those who sought advice as to the consequences of acquiring a U.S. residency for U.S. gift and estate taxes
34.5%
Obtained advice for making gifts of non-U.S. property prior to coming to the U.S. 10.9%
After emigrating to the U.S., those who sought tax advice 49.6%
Of the above group, those who sought advice on U.S. estate planning that could minimize estate taxes 6.8%
Planning Opportunities
A survey of recent immigrants to the U.S. with net worth of $10 million or more found:
Source: “Clueless,” Trusts and Estates, December 2003
For producer use only. Not for distribution to the public.
U.S. Transfer Tax: Basis of Application
Citizenship
Worldwide assets subject to transfer tax
Residency
Non-U.S. Citizen with U.S. Home: non-citizenliving in U.S. permanently
Worldwide assets subject to transfer tax
Non-U.S. Citizen (aka, Foreign National): non-citizen who does not live in U.S.
Only assets in U.S. subject to transfer tax
For producer use only. Not for distribution to the public.
U.S. Tax Treaties with Foreign Countries
U.S. income, gift, and estate tax treaties with somecountries may preempt general U.S. estate and gift tax rules
Some countries with which the U.S. has gift tax treaties: Australia, Austria, Denmark, France, Germany, Japan, United Kingdom
Some countries with which the U.S. has estate tax treaties: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, Norway, South Africa, Switzerland, United Kingdom
For producer use only. Not for distribution to the public.
Unlimited Marital Deduction
No Deduction
Estate Tax Case Study
U.S. citizenJohn Davis
Non-U.S. citizenJudy Sevilla-Davis
No DeductionUnlimited Marital Deduction
For producer use only. Not for distribution to the public.
What are Judy’s options if John dies in 2011 and the couple has no estate plan?
Estate Tax Case Study
U.S. citizenJohn Davis
Non-U.S. citizenJudy Sevilla-Davis
QDOT
Unlimited Marital Deduction
Unlimited Marital Deduction
For producer use only. Not for distribution to the public.
Nanette Rousseau
Non-Resident Alien Unmarried $14,000,000 in U.S. based
Commercial real estate
What can Nanette do to minimize exposure to U.S. estate and gift tax?
Estate Tax Case Study
For producer use only. Not for distribution to the public.
Estate Tax Case Study
Non-U.S. citizenNanette Rousseau
CommercialReal Estate
Property
Corporation
Nanette's EstateNanette's Estate
Beneficiary 2
Beneficiary 2Beneficiary 1
For producer use only. Not for distribution to the public.
Nonresident Aliens: U. S. Gift and Estate Tax Rules
* A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.
Type of property transferred
Subject to U.S. Gift tax
Subject toU.S. Estate tax
Real property located in U.S. Yes Yes
U.S. tangible personal property (i.e., cash, jewelry, paintings, automobiles) Yes Yes
U.S. intangible personal property (i.e., stocks in U.S. corp., interest in U.S. partnership)
No Yes
Ownership interest in a U.S. life insurance policy on the life of another No Yes
Ownership interest in a U.S. life insurance policy on oneself No* No
For producer use only. Not for distribution to the public.
Foreign National Underwriting FAQs
Vicki GarrettSenior Underwriting Consultant,
International Underwriting
For producer use only. Not for distribution to the public.
Basic Rules
Policy must be signed in the U.S. by the owner and the insured
No solicitation or sale may take place outside of the U.S.
Premiums must be paid in U.S. dollars
Policy delivery needs to take place in the U.S.
Medical underwriting generally takes place in the U.S.
For producer use only. Not for distribution to the public.
Underwriting
An exam may be done outside of the U.S. only on a case by case basis
Prior approval must be obtained from the Director
Approval e-mail needs to be submitted with the Application
For producer use only. Not for distribution to the public.
Attending Physician’s Statement
All documents must be completed in English
Some medical records may be translated in-house: Spanish, Portuguese, French and Chinese
Other languages will require a translation service
For producer use only. Not for distribution to the public.
Premium payments
Payments should be made from a U.S. bank
Many foreign banks will have a U.S. affiliate
For producer use only. Not for distribution to the public.
Maximum Coverage Amount
No Jumbo limit for foreign nationals
Difficult to obtain support for amounts of $20 million and above
For producer use only. Not for distribution to the public.
Auto Bind Capabilities
*Including England, Scotland and Wales, but excluding Northern Ireland
Countries eligible for auto bind risk (for U.S. or Canadian Citizens up to $35,000,000 of death benefit):
Andorra, Argentina, Australia, Austria, Barbados, Belgium, Bermuda, Brazil, British Virgin Islands, Chile, Denmark, Finland, France, Germany, Hong Kong, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Taiwan
United Kingdom*
All other countries and Non-U.S./Non-Canadian citizens require reinsurance support.
For producer use only. Not for distribution to the public.
Maximum Retention
Maximum retention = $5 million
First $1 million is retained and reinsurance support sought for anything over $1 million
If reinsurance support is not obtained, we may fully retain up to $5 million on a case by case basis
For producer use only. Not for distribution to the public.
Underwriting Documents
Signed application
Copies of visa/green card
Foreign Nationals & Foreign Travel Application Supplement
For producer use only. Not for distribution to the public.
Underwriting Guidelines for Mexican Nationals
Premium notices must be mailed to a U.S. address
Best class is standard for Mexican nationals living in Border towns Monterrey State of Michoacán
Transamerica can offer best class to Mexican citizens residing outside of those areas
Payments must be made outside of Mexico
No solicitation can be done in Mexico
For producer use only. Not for distribution to the public.
Underwriting Guidelines for Mexican Nationals: Border Towns
Tijuana, Nogales, Ciudad Juarez, Nuevo Laredo, Reynosa, Monterrey, Matamoros and the State of Michoacán
All other border towns will be considered on a case by case basis
For producer use only. Not for distribution to the public.
Non-insurable Foreign Nationals
No published list available
Inquiries can be sent to [email protected] and a response will be sent back within 24 hours
For producer use only. Not for distribution to the public.
Underwriting Standards
Normal age and amount requirements apply
Copy of Visa
Travel & Residency Questionnaire
For producer use only. Not for distribution to the public.
U.S. Citizens and Foreign Travel
Travel is less than 183 days annually
Appropriate action will be taken for future travel to countries listed as declinable or rated destinations
States with legislation that does not allow us to rate or decline for travel: California, Colorado, Connecticut, Florida, Georgia, Illinois, Massachusetts, Minnesota, Missouri, New Jersey, Tennessee, Virginia, Washington (state)
For producer use only. Not for distribution to the public.
Tools and Resources
For producer use only. Not for distribution to the public.
Save the Date: September 14
Next Tip-Off:Why Insurance Professionals Should Sell Qualified Plans
29
For producer use only. Not for distribution to the public.
This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here.
Transamerica Insurance & Investment Group (“Transamerica”) and its representatives do not give tax or legal advice. This material is provided for informational purposes only and should not be construed as tax or legal advice. Clients and other interested parties must be urged to consult with and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here.
Discussions of the various planning strategies and issues are based on our understanding of the applicable federal tax laws in effect at the time of presentation. However, tax laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Transamerica’s interpretations. Additionally, this material does not consider the impact of applicable state laws upon clients and prospects.
Although care is taken in preparing this material and presenting it accurately, Transamerica disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. This information is current as of July 2010.
Transamerica Financial Life Insurance Company is authorized to conduct business in New York.Transamerica Life Insurance Company is authorized to conduct business in all other states.
OL 2055H 0810
For producer use only. Not for distribution to the public.
Foreign Nationals Planning: Making it Simple for Producers
Andrea Valdez-Brandon, J.D. CLUAdvanced Marketing Consultant
Vicki GarrettSenior Underwriting Consultant, International Underwriting
TIP-OFF TO SALES