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Clearing up a bit of confusion with the Structured Sale
By mauch | January 26, 2007
I recently came across a company who offers capital gains tax deferral strategies to sellers of appreciated assets. This particular company used to offer the now defunct Private Annuity Trust and is offering something else instead. (You will find their google ads and websites all over the net… you have probably seen them before but I choose not to mention names because that is not my style)
Anyhow, I signed up for their “Free Report” and have been receiving their “educational” email over the past week or two. In the latest email she describes the Structured Sale, but I noticed that there are a few pretty big errors that need clearing up so you know the truth about the Structured Sale.
The first error she states:
“…the only Assignment Companies offering structured sales are owned by large insurance companies.”
I know, this is splitting hairs, but the statement is wrong. The Assignment Companies are not “owned” by any insurance companies. They are instead their own stand alone company with their own management and board of directors. These assignment companies were, however, originally formed by the insurance companies and have a strong affiliation to them. So…I know this detail is minute, but I wanted to clear it up.
Another big detail that is misrepresented in her email series is:
…”whenever you pass away whatever money had not been paid out to you is kept by the insurance carrier.”
This statement is somewhat misleading. The fact of the Structured Sale is that it can be passed on to your spouse, heirs, estate, etc. upon the death of the beneficiary. In the paperwork that we prepare, we map out exactly what you would like done with the remaining payments if you should die before all payments are received. The remaining payments will then be made to whom you choose and your heirs and estate will not miss out on the equity due to you in the Structured Sale.
Don’t get me wrong, there are annuity products that do only pay out until the beneficiary dies. However, the Structured Sale can be structured so the remaining payments can be passed on.
I don’t mean for this post to be discrediting the writer of the email series or her company. I just wanted to clear up some facts she had wrong so you can make a truly informed decision on the deferral of your capital gains tax.
Until next time…
Topics: Tax deferral talk, Structured Sale |