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Exchange trade currency futures by month end
Economy Bureau
Posted online: Wednesday, August 06, 2008 at 22:17 hrs
Updated On: Wednesday, August 06, 2008 at 22:17 hrs
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The Securities & Exchange Board of India (Sebi) will launch a pilot alternative payment system for public issues by August-end, which would allow investors to keep the application money in their bank accounts till they are allotted shares.
"Hopefully by August end, we will start the pilot project," Sebi chairman CB Bhave told reporters at a seminar organised by the Financial Planning Standards Board India.
NOTE: BHAVE IS A RESPECTED PERSONALITY IN SEBI.
Further, the markets regulator is expected to launch the exchange trade currency futures by this month-end. So far three entities—NSE, MCX-promoter Financial Technologies and a consortium of HDFC, Kotak and SBI —have evinced interest in starting these products.
The pilot payment system would enable investors to earn interest income on their application money till the time of allotment, while sparing them from the hassles of getting refunds in case they are not allotted shares.
Bhave said the current system of payment through cheques and the alternate system would co-exist. Commenting on the pilot system, he said, "We really don't know how the system works. We need to get used to it. We have to sort out glitches if there are any in the beginning."
The alternate payment system, called additional mode of payment through applications supported by blocked amount, will exempt retail investors from making full advance fees. Instead, it would let them retain the in bank accounts till the completion of allotment. The system is dependent on 'Self Certified Syndicate Banks' (SCSB) that would accept the application of retail investors. Banks that wish to offer the ASBA facility must submit a certificate to Sebi for inclusion of its name in the SCSB list. Under the scheme, the SCSBs will block funds to the extent of the bid amount, upload the details in the electronic bidding system and then unblock funds of finalisation of allotment.
This mode of payment will apply only to public issues offered under the book building route and only those retail investors would be part of this payment process who bid at the cut-off price as the single option and agree not to revise their bids.
On exchange traded currency futures, Sebi chairman said that three entities have applied for launching these products. When asked about the specific timeframe for the launch of currency futures, Bhave said this was not in the regulator's hands as the three entities are in various stages of preparing software and setting up hardware for the...
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» Exchage traded Currency
Posted by Shyam.P.Kunte on 2008-08-06 09:26:54.130376+05:30
Another exchange is getting born here for speculators mostly of FIIs/Foreign Banks/Corporates to defraud gullible small investors.How come SEBI has forgotten the current MTM losses fiasco and really it is surprising.In a Trade deficit country like ours and with huge unwanted Forex reserves it will spell disaster in long term.May god save our Nation from those tricky financial gambling products.JaiHind
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Disclosure of Shareholdings in Accordance with Stock Market Rules
Last update: 12:16 p.m. EDT Aug. 7, 2008
GENEVA, SWITZERLAND, Aug 07, 2008 (MARKET WIRE via COMTEX) -- Addex Pharmaceuticals (SWISS: ADXN) announced today that on August 6, 2008, Varuma AG, Aeschenvorstadt 55, 4051 Basel, Switzerland, has informed of exceeding the threshold of 3% in the shareholding of Addex Pharmaceuticals Ltd., holding a total of 231,425 registered shares, corresponding to 3.95% of the voting rights. The beneficiary of the shareholdings of Varuma AG is Mr. Rudolf Maag, at Neuhofweg 11, 4102 Binningen, Switzerland.
NOTE: ADDEX IS A WELL KNOWN PHARMACEUTICAL COMPANY.
About Addex
Addex Pharmaceuticals discovers and develops allosteric modulators for human health. Allosteric modulators are an emerging class of orally available small molecule therapeutic agents that we believe will offer patients better results than classical drugs. Most marketed drugs bind receptors where the body's own natural molecular activators (i.e. endogenous ligands) bind, specifically to a key part of each receptor's anatomy called the "active site". In short, most drugs must out-compete endogenous ligands for the active site. By contrast, allosteric modulators are non-competitive because they bind receptors and modify their function even if the endogenous ligand also is binding it. In addition, because of this, allosteric modulators aren't limited to simply turning a receptor on or off, the way most drugs are. Instead, they act more like a dimmer switch, offering control over the degree of activation or deactivation, while offering the body the ability to maintain control over initiating receptor activation. Furthermore, the allosteric approach generally affords freedom to operate - even on well-known, clinically validated targets - because the intellectual property surrounding allosteric chemistry and the allosteric sites on receptors is most often un-exploited.
ADX10059, our most advanced product, is an mGluR5 NAM (metabotropic glutamate receptor 5 negative allosteric modulator). It has demonstrated clinically and statistically significant efficacy in separate Phase IIa clinical trials in gastroesophageal reflux disease (GERD) patients and migraine headache patients and has potential in additional indications.
The Addex allosteric modulation discovery and development platform have been additionally validated through three seperatate product license or collaboration agreements with Merck & Co., Inc. and Johnson & Johnson as well as investments by Roche Ventures and SR One, the venture investment arm of GlaxoSmithKline. Contacts
Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "not approvable", "continue", "believes", "believe", "will", "remained open to exploring", "would", "could", or similar expressions, or by express or implied discussions regarding Addex Pharmaceuticals Ltd, its business, the potential approval of its products by regulatory authorities, or regarding potential future revenues from such products. Such forward- looking statements reflect the current views of Addex Pharmaceuticals Ltd regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that allosteric modulators of mGluR4, mGluR2 or mGluR5 will be approved for sale in any market or by any regulatory authority. Nor can there be any guarantee that allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets will achieve any particular levels of revenue (if any) in the future. In particular, management's expectations regarding allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets could be affected by, among other things, unexpected actions by our partners, unexpected regulatory actions or delays or government regulation generally; unexpected clinical trial results, including unexpected new clinical data and unexpected additional analysis of existing clinical data; competition in general; government, industry and general public pricing pressures; the company's ability to obtain or maintain patent or other proprietary intellectual property protection. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Addex Pharmaceuticals is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
Copyright Copyright Hugin AS 2008. All rights reserved.
Chris Maggos
Head of IR & Communications
Addex Pharmaceuticals
+41 22 884 15 11
Email Contact
SOURCE: Addex Pharmaceuticals
http://www2.marketwire.com/mw/emailprcntct?id=07E63FA2DB9FD852
Copyright 2008 Market Wire, All rights reserved.
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Disclosure of Shareholdings in Accordance with Stock Market Rules
Last update: 12:16 p.m. EDT Aug. 7, 2008
GENEVA, SWITZERLAND, Aug 07, 2008 (MARKET WIRE via COMTEX) -- Addex Pharmaceuticals (SWISS: ADXN) announced today that on August 6, 2008, Varuma AG, Aeschenvorstadt 55, 4051 Basel, Switzerland, has informed of exceeding the threshold of 3% in the shareholding of Addex Pharmaceuticals Ltd., holding a total of 231,425 registered shares, corresponding to 3.95% of the voting rights. The beneficiary of the shareholdings of Varuma AG is Mr. Rudolf Maag, at Neuhofweg 11, 4102 Binningen, Switzerland.
NOTE: ADDEX IS A WELL KNOWN PHARMACEUTICAL COMPANY.
About Addex
Addex Pharmaceuticals discovers and develops allosteric modulators for human health. Allosteric modulators are an emerging class of orally available small molecule therapeutic agents that we believe will offer patients better results than classical drugs. Most marketed drugs bind receptors where the body's own natural molecular activators (i.e. endogenous ligands) bind, specifically to a key part of each receptor's anatomy called the "active site". In short, most drugs must out-compete endogenous ligands for the active site. By contrast, allosteric modulators are non-competitive because they bind receptors and modify their function even if the endogenous ligand also is binding it. In addition, because of this, allosteric modulators aren't limited to simply turning a receptor on or off, the way most drugs are. Instead, they act more like a dimmer switch, offering control over the degree of activation or deactivation, while offering the body the ability to maintain control over initiating receptor activation. Furthermore, the allosteric approach generally affords freedom to operate - even on well-known, clinically validated targets - because the intellectual property surrounding allosteric chemistry and the allosteric sites on receptors is most often un-exploited.
ADX10059, our most advanced product, is an mGluR5 NAM (metabotropic glutamate receptor 5 negative allosteric modulator). It has demonstrated clinically and statistically significant efficacy in separate Phase IIa clinical trials in gastroesophageal reflux disease (GERD) patients and migraine headache patients and has potential in additional indications.
The Addex allosteric modulation discovery and development platform have been additionally validated through three seperatate product license or collaboration agreements with Merck & Co., Inc. and Johnson & Johnson as well as investments by Roche Ventures and SR One, the venture investment arm of GlaxoSmithKline. Contacts
Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "not approvable", "continue", "believes", "believe", "will", "remained open to exploring", "would", "could", or similar expressions, or by express or implied discussions regarding Addex Pharmaceuticals Ltd, its business, the potential approval of its products by regulatory authorities, or regarding potential future revenues from such products. Such forward- looking statements reflect the current views of Addex Pharmaceuticals Ltd regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results with allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that allosteric modulators of mGluR4, mGluR2 or mGluR5 will be approved for sale in any market or by any regulatory authority. Nor can there be any guarantee that allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets will achieve any particular levels of revenue (if any) in the future. In particular, management's expectations regarding allosteric modulators of mGluR4, mGluR2, mGluR5 or other therapeutic targets could be affected by, among other things, unexpected actions by our partners, unexpected regulatory actions or delays or government regulation generally; unexpected clinical trial results, including unexpected new clinical data and unexpected additional analysis of existing clinical data; competition in general; government, industry and general public pricing pressures; the company's ability to obtain or maintain patent or other proprietary intellectual property protection. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Addex Pharmaceuticals is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
Copyright Copyright Hugin AS 2008. All rights reserved.
Chris Maggos
Head of IR & Communications
Addex Pharmaceuticals
+41 22 884 15 11
Email Contact
SOURCE: Addex Pharmaceuticals
http://www2.marketwire.com/mw/emailprcntct?id=07E63FA2DB9FD852
Copyright 2008 Market Wire, All rights reserved.
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21 minutes ago Shanghai stocks drop ahead of Olympics ceremony
10:30 PM 8/7/08 Rackspace prices IPO at $12.50 a share
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U.S. stocks end steeply down as financials shake up market
U.S. workers must unite to protect their 401(k) savings
Supply and demand turned upside down as commodities plunge
U.S. stock futures drops on AIG loss, Wal-Mart view
Oil futures end losing streak on pipeline shutdown
AIG shares drop by record 18% after 'horrific' results
CORRECT: Pending home sales index rises 5.3% in June: NAR
Citi to settle charges on auction-rate securities
Media's self-censorship over Edwards is bigger scandal
Why McCain would be a mediocre president
U.S. workers must unite to protect their 401(k) savings
Supply and demand turned upside down as commodities plunge
Media's self-censorship over Edwards is bigger scandal
CORRECT: Pending home sales index rises 5.3% in June: NAR
Long-time Bear Granville turns bullish
Citi to settle charges on auction-rate securities
Global coal demand is swelling and these companies will benefit
AIG shares drop by record 18% after 'horrific' results
Decoding the latest business buzzwords
Shanghai stocks drop ahead of Olympics ceremony
Rackspace prices IPO at $12.50 a share
General obligation bonds have edge over other tax-free munis
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Europe Insurers Shift Focus
Life Operations
Are Expanded in Bid
To Protect Profits
By GORAN MIJUK
June 30, 2008; Page C5
ZURICH -- With prices for property and casualty insurance expected to continue falling this year, some European insurers and reinsurers are boosting their life-insurance operations and could pursue takeovers to protect premium growth and profits.
Some life-insurance markets, especially in emerging Asian economies, promise double-digit growth rates because of rising demand for life savings products from increasing numbers of affluent people. As growth for other insurance business is expected to remain sluggish in mature markets like the U.S. and Europe, analysts also expect more takeovers and business tie-ups.
[Jacques Aigrain]
NOTE: LIFE INSURANCE IS INDEED A NEED MAY IT BE IN TIMES OF CRISIS.
World-wide nonlife premiums fell 0.3% last year, while life premiums rose 4.7%, according to data from Swiss Re, which said the trend is expected to stay in place. In Russia, life-premium volume jumped 30%.
Some industry executives and analysts warn that because of a mass move toward emerging markets, growth rates may be less pronounced than expected. Many also caution that large takeovers may be the wrong avenue to boost growth because of the high cost of capital.
"The efforts to increase the life-insurance portfolio by insurance and reinsurance companies are certainly positive," says Rene Locher, a Zurich-based insurance analyst for Sal. Oppenheim. "But the move toward life insurance alone won't be able to fully compensate the fall in prices in the nonlife sector."
NOTE: RENE LOCHER IS A RESPECTED PERSONALITY IN THE INSURANCE INDUSTRY.
Swiss Re, the world's largest reinsurer in terms of premiums, is shifting focus to life, saying that prices for other insurance, especially in mature markets, are falling. Reinsurance companies provide insurance to insurers, in exchange for a fee.
"We are allocating our capital efficiently to the lines of business with the best return, for example in the life sector," said Swiss Re Chief Executive Officer Jacques Aigrain. He noted that Swiss Re has substantially reduced its exposure to insuring business risk and is now allocating more capital to life-insurance businesses, including those focused on retirement planning.
Companies and analysts say that while life insurance premiums will increase, other insurance and reinsurance prices will weaken fast this year after rising for several years. Besides fierce competition, a weakening economy in the U.S. and in Europe is also expected to put pressure on premiums this year.
Still, emerging markets make up only about a tenth of all the insurance business in industrialized markets. General annual life and nonlife premiums in industrialized countries stood at around $3.6 trillion at the end of 2007, compared with $414 billion in emerging markets.
Hannover Re, which ranks third in premium income among the world's largest reinsurers, after Swiss Re and Munich Re, also hopes that its growing life reinsurance business will help it increase profit this year. CEO Wilhelm Zeller said in June that the company expects to see "double-digit growth" in premiums and net profit from its life and health businesses. The company hopes to boost its life business by 12% to 15% this year, offsetting weak premiums in other businesses, which are expected to shrink by around 5% compared with last year.
French reinsurance company Scor SA also sees strong growth, with less volatility, in the life insurance sector, CEO Denis Kessler said Thursday.
But as the natural growth of business is likely to be too slow, insurance analysts also expect companies to engage in some mergers and acquisitions, although risks will be high given current market volatility.
At Swiss Re, Mr. Aigrain said the company isn't planning any big takeovers but is looking at buying life insurance portfolios from other insurers.
Zurich Financial Services, whose profit depends predominantly on its nonlife business, is believed to be a frontrunner in bidding for Royal Bank of Scotland Group PLC's life and nonlife insurance business. Zurich Financial has repeatedly declined to comment on the market speculation.
The financial market hasn't reacted well to Zurich Financial's presumed interest in the RBS unit, though, fearing that it might pay too much and have to raise new capital. Since the beginning of May, when the Swiss insurer was mentioned for the first time as a possible bidder, its stock has fallen around 20%.
Still, Zurich Financial says it sees growth opportunities in all insurance sectors. "It's not a matter of pitting general insurance against life insurance, since we see attractive opportunities in both", said Zurich Financial Chief Financial Officer Dieter Wemmer Thursday.
Write to Goran Mijuk at goran.mijuk@dowjones.com
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Europe Insurers Shift Focus
Life Operations
Are Expanded in Bid
To Protect Profits
By GORAN MIJUK
June 30, 2008; Page C5
ZURICH -- With prices for property and casualty insurance expected to continue falling this year, some European insurers and reinsurers are boosting their life-insurance operations and could pursue takeovers to protect premium growth and profits.
Some life-insurance markets, especially in emerging Asian economies, promise double-digit growth rates because of rising demand for life savings products from increasing numbers of affluent people. As growth for other insurance business is expected to remain sluggish in mature markets like the U.S. and Europe, analysts also expect more takeovers and business tie-ups.
[Jacques Aigrain]
NOTE: LIFE INSURANCE IS INDEED A NEED MAY IT BE IN TIMES OF CRISIS.
World-wide nonlife premiums fell 0.3% last year, while life premiums rose 4.7%, according to data from Swiss Re, which said the trend is expected to stay in place. In Russia, life-premium volume jumped 30%.
Some industry executives and analysts warn that because of a mass move toward emerging markets, growth rates may be less pronounced than expected. Many also caution that large takeovers may be the wrong avenue to boost growth because of the high cost of capital.
"The efforts to increase the life-insurance portfolio by insurance and reinsurance companies are certainly positive," says Rene Locher, a Zurich-based insurance analyst for Sal. Oppenheim. "But the move toward life insurance alone won't be able to fully compensate the fall in prices in the nonlife sector."
NOTE: RENE LOCHER IS A RESPECTED PERSONALITY IN THE INSURANCE INDUSTRY.
Swiss Re, the world's largest reinsurer in terms of premiums, is shifting focus to life, saying that prices for other insurance, especially in mature markets, are falling. Reinsurance companies provide insurance to insurers, in exchange for a fee.
"We are allocating our capital efficiently to the lines of business with the best return, for example in the life sector," said Swiss Re Chief Executive Officer Jacques Aigrain. He noted that Swiss Re has substantially reduced its exposure to insuring business risk and is now allocating more capital to life-insurance businesses, including those focused on retirement planning.
Companies and analysts say that while life insurance premiums will increase, other insurance and reinsurance prices will weaken fast this year after rising for several years. Besides fierce competition, a weakening economy in the U.S. and in Europe is also expected to put pressure on premiums this year.
Still, emerging markets make up only about a tenth of all the insurance business in industrialized markets. General annual life and nonlife premiums in industrialized countries stood at around $3.6 trillion at the end of 2007, compared with $414 billion in emerging markets.
Hannover Re, which ranks third in premium income among the world's largest reinsurers, after Swiss Re and Munich Re, also hopes that its growing life reinsurance business will help it increase profit this year. CEO Wilhelm Zeller said in June that the company expects to see "double-digit growth" in premiums and net profit from its life and health businesses. The company hopes to boost its life business by 12% to 15% this year, offsetting weak premiums in other businesses, which are expected to shrink by around 5% compared with last year.
French reinsurance company Scor SA also sees strong growth, with less volatility, in the life insurance sector, CEO Denis Kessler said Thursday.
But as the natural growth of business is likely to be too slow, insurance analysts also expect companies to engage in some mergers and acquisitions, although risks will be high given current market volatility.
At Swiss Re, Mr. Aigrain said the company isn't planning any big takeovers but is looking at buying life insurance portfolios from other insurers.
Zurich Financial Services, whose profit depends predominantly on its nonlife business, is believed to be a frontrunner in bidding for Royal Bank of Scotland Group PLC's life and nonlife insurance business. Zurich Financial has repeatedly declined to comment on the market speculation.
The financial market hasn't reacted well to Zurich Financial's presumed interest in the RBS unit, though, fearing that it might pay too much and have to raise new capital. Since the beginning of May, when the Swiss insurer was mentioned for the first time as a possible bidder, its stock has fallen around 20%.
Still, Zurich Financial says it sees growth opportunities in all insurance sectors. "It's not a matter of pitting general insurance against life insurance, since we see attractive opportunities in both", said Zurich Financial Chief Financial Officer Dieter Wemmer Thursday.
Write to Goran Mijuk at goran.mijuk@dowjones.com
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Related Content may require a subscription | Subscribe Now -- Get 2 Weeks FREE
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• How to Keep Health Insurance When You Lose Your Job Jun. 26, 2008
Related Web News
• Cost Of Living - Cheaper, Yes, but Only on the Price - NYTimes.com Jun. 28, 2008 nytimes.com
• Is Liability Insurance a Must to Go Global? Jun. 18, 2008 businessweek.com
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Friday, July 4, 2008
CAN YOU AFFORD LONG -TERM- CARE INSURANCE?
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Home > Money & Business > Planning to Retire > Can You Afford Long-Term-Care Insurance?
« 8 More Ways to Save in Retirement
Planning to Retire by Emily Brandon
Can You Afford Long-Term-Care Insurance?
June 30, 2008 01:09 PM ET | Emily Brandon | Permanent Link
Long-term care is likely to be most Americans' greatest expense of all in retirement. A private room in a nursing home costs $76,460 annually on average, or $209 a day, and Medicare typically won't cover it.
Long-term-care insurance can help protect you from some of these unpredictable costs. It can be used to pay for nursing home expenses, adult day care, and in-home help for seniors with chronic conditions or who need extra help recovering from an illness.
But this pricey insurance is prohibitively expensive for many people. AARP estimates that a 65-year-old in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing-home and home care. And Fidelity Investments estimates that a couple, both of whom are 65 in 2008, will need $85,000 to insure against a lifetime of long-term-care expenses.
NOTE: THINGS TO CONSIDER PRIOR TO GETTING A LIFE INSURANCE...
If you're going to buy long-term-care insurance, here are a few things to consider:
Premiums. Find out what the premium is now and what it will cost in the future. Ask if a pre-existing medical condition could influence premium prices. AARP says you may not want to buy a policy if the cost of premiums will lower your standard of living or force you to give up other things you need right now. The National Program on Women and Aging recommends that, as a rule of thumb, premiums should be less than 20 percent of your disposable income after all other essential bills are paid. So, this type of insurance is primarily appropriate for people with assets between $200,000 and $1.5 million, according to Consumer Reports. Both long-term-care expenses and insurance are so expensive that almost all middle- and low-income households rely on Medicaid for nursing home care after they spend down their assets to a level at which they qualify.
NOTE: AARP IS A WELL RESPECTED COMPANY IN THE INSURANCE INDUSTRY.
Coverage. You can choose to be covered for different varieties of home healthcare, nursing-home care, or both. Some providers offer lower premiums if you agree to a waiting period of up to 100 days before coverage begins, during which you pay all of your own expenses.
Be sure to ask about the duration of coverage. Long-term-care coverage doesn't always last that long. The average length of stay in a nursing home is 3.7 years for women and 2.7 years for men, according to Joan Bloom, a senior vice president for Fidelity Investments Life Insurance Co. You can choose a benefit period as short as two years or as long as the rest of your life. And you'll want to find out about maximum daily, monthly, or lifetime payouts and whether they are indexed for inflation. If your care costs more than the caps, you will have to pay for it out of your own pocket.
The company. Ask what happens if the insurance company should go out of business before you need long-term-care coverage. And check out its track record for paying out claims. You can examine ratings of companies online at A.M. Best, Moody's, and Standard & Poor's. Consumer Reports recommends that you buy only from insurers that are rated in the top two financial-strength categories by at least two of the ratings services. You can also check up on a company with your state insurance department.
The fine print. Read any contract you sign carefully, and ask questions. Find out how to cancel, what happens if you stop paying the premiums, how many times you can renew, and what needs to happen before you can begin using your benefits. A fee-only financial planner, whom you pay by the hour and who doesn't accept commissions for selling you financial products, can help you decipher the fine-print sales pitch.
Your state. Insurance laws and options vary by state. The nonprofit Family Caregiver Alliance has a Web tool to help consumers peruse long-term-care options in each state. And the National Association of Insurance Commissioners offers consumer tips for buying long-term-care insurance.
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Home > Money & Business > Planning to Retire > Can You Afford Long-Term-Care Insurance?
« 8 More Ways to Save in Retirement
Planning to Retire by Emily Brandon
Can You Afford Long-Term-Care Insurance?
June 30, 2008 01:09 PM ET | Emily Brandon | Permanent Link
Long-term care is likely to be most Americans' greatest expense of all in retirement. A private room in a nursing home costs $76,460 annually on average, or $209 a day, and Medicare typically won't cover it.
Long-term-care insurance can help protect you from some of these unpredictable costs. It can be used to pay for nursing home expenses, adult day care, and in-home help for seniors with chronic conditions or who need extra help recovering from an illness.
But this pricey insurance is prohibitively expensive for many people. AARP estimates that a 65-year-old in good health can expect to pay between $2,000 and $3,000 a year for a policy that covers nursing-home and home care. And Fidelity Investments estimates that a couple, both of whom are 65 in 2008, will need $85,000 to insure against a lifetime of long-term-care expenses.
NOTE: THINGS TO CONSIDER PRIOR TO GETTING A LIFE INSURANCE...
If you're going to buy long-term-care insurance, here are a few things to consider:
Premiums. Find out what the premium is now and what it will cost in the future. Ask if a pre-existing medical condition could influence premium prices. AARP says you may not want to buy a policy if the cost of premiums will lower your standard of living or force you to give up other things you need right now. The National Program on Women and Aging recommends that, as a rule of thumb, premiums should be less than 20 percent of your disposable income after all other essential bills are paid. So, this type of insurance is primarily appropriate for people with assets between $200,000 and $1.5 million, according to Consumer Reports. Both long-term-care expenses and insurance are so expensive that almost all middle- and low-income households rely on Medicaid for nursing home care after they spend down their assets to a level at which they qualify.
NOTE: AARP IS A WELL RESPECTED COMPANY IN THE INSURANCE INDUSTRY.
Coverage. You can choose to be covered for different varieties of home healthcare, nursing-home care, or both. Some providers offer lower premiums if you agree to a waiting period of up to 100 days before coverage begins, during which you pay all of your own expenses.
Be sure to ask about the duration of coverage. Long-term-care coverage doesn't always last that long. The average length of stay in a nursing home is 3.7 years for women and 2.7 years for men, according to Joan Bloom, a senior vice president for Fidelity Investments Life Insurance Co. You can choose a benefit period as short as two years or as long as the rest of your life. And you'll want to find out about maximum daily, monthly, or lifetime payouts and whether they are indexed for inflation. If your care costs more than the caps, you will have to pay for it out of your own pocket.
The company. Ask what happens if the insurance company should go out of business before you need long-term-care coverage. And check out its track record for paying out claims. You can examine ratings of companies online at A.M. Best, Moody's, and Standard & Poor's. Consumer Reports recommends that you buy only from insurers that are rated in the top two financial-strength categories by at least two of the ratings services. You can also check up on a company with your state insurance department.
The fine print. Read any contract you sign carefully, and ask questions. Find out how to cancel, what happens if you stop paying the premiums, how many times you can renew, and what needs to happen before you can begin using your benefits. A fee-only financial planner, whom you pay by the hour and who doesn't accept commissions for selling you financial products, can help you decipher the fine-print sales pitch.
Your state. Insurance laws and options vary by state. The nonprofit Family Caregiver Alliance has a Web tool to help consumers peruse long-term-care options in each state. And the National Association of Insurance Commissioners offers consumer tips for buying long-term-care insurance.
Tags: insurance | retirement
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1. 8 More Ways to Save in Retirement
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Thursday, July 3, 2008
AEGON RELIGARE LIFE INSURANCE GETS FINAL IRDA NOD
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AEGON Religare Life Insurance gets final IRDA nod
30 Jun, 2008, 1742 hrs IST, ECONOMICTIMES.COM
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MUMBAI: AEGON Religare Life Insurance Company has received the final approval from the Insurance Regulatory & Development Authority to operate in the life insurance space. The R3 license from the IRDA is the last of the three steps in the registration process.
"Our plans for the nationwide launch are now ready for execution. We will strive to delight our customers through a fresh approach, innovative solutions and seamless delivery," said Rajiv Jamkhedkar, CEO, AEGON Religare Life Insurance, which is a joint venture between AEGON and Religare.
NOTE: AEGON AND RELIGARE HAVE A VERY IMPORTANT ROLE IN THE INSURANCE INDUSTRY.
AEGON is one of the world's largest life insurance and pension companies with presence in more than 20 countries. It employs about 30,000 people, and services over 40 million customers across the world.
Religare is a leading integrated financial services institution. The company's retail network is spread in over 1,300 locations across more than 400 cities and towns in India. It has total employee strength of more than 10,000.
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AEGON Religare Life Insurance gets final IRDA nod
30 Jun, 2008, 1742 hrs IST, ECONOMICTIMES.COM
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MUMBAI: AEGON Religare Life Insurance Company has received the final approval from the Insurance Regulatory & Development Authority to operate in the life insurance space. The R3 license from the IRDA is the last of the three steps in the registration process.
"Our plans for the nationwide launch are now ready for execution. We will strive to delight our customers through a fresh approach, innovative solutions and seamless delivery," said Rajiv Jamkhedkar, CEO, AEGON Religare Life Insurance, which is a joint venture between AEGON and Religare.
NOTE: AEGON AND RELIGARE HAVE A VERY IMPORTANT ROLE IN THE INSURANCE INDUSTRY.
AEGON is one of the world's largest life insurance and pension companies with presence in more than 20 countries. It employs about 30,000 people, and services over 40 million customers across the world.
Religare is a leading integrated financial services institution. The company's retail network is spread in over 1,300 locations across more than 400 cities and towns in India. It has total employee strength of more than 10,000.
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Wednesday, July 2, 2008
NAMIBIA: LIFE INSURANCE, RIP-OFF OR PAY-OFF?
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Namibia: Life Insurance, Rip-Off Or Pay-Off?
The Namibian (Windhoek)
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The Namibian (Windhoek)
COLUMN
30 June 2008
Posted to the web 30 June 2008
Windhoek
Seeing the value in life insurance is often, as is the case with many intangible goods, somewhat difficult at first glance.
For example, life insurance that pays out when the insured life dies. Many people believe they will never get anything back in return for their premiums. A closer look, however, quickly shows that this is not true.
NOTE: STUDY OF LIFE INSURANCE IS HIGHLY RECOMMENDED.
In qualifying this statement, it is important to take into account that life cover generally takes on one of two forms - the one form is term insurance which will only pay out the contracted life cover should the person whose life is insured die within the agreed time period for which the cover is taken out.
The other form is whole life insurance which pays out the contracted life cover at whatever point in time the life insured dies.
It is thus clear that if a whole life policy is maintained, at some future time there will be a payoff.
The premium payable for term cover is less than for whole life cover, all other things being equal.
Whether you select a term insurance option or a whole life insurance option should be determined by the need you are attempting to address - if life cover is only needed for a very specific period of time (e.g. for bond cover where it is known in what period the bond will be repaid and there is no additional need for life cover after repayment of the bond) term cover might suffice, but as a general rule it is better and wiser to take out whole life cover.
NOTE: IT IS ALSO IMPORTANT TO LISTEN TO STORIES OF THOSE WHO GOT INSURANCE.
A short example to illustrate the value of taking out whole life insurance is outlined below: Joe is a 35 year old male accountant with a wife and two children.
Joe's financial adviser has done a capital needs analysis for him, from which it is evident that Joe's dependants would require N$1 million capital to replace the loss of income his family would suffer should he die today.
A quotation for N$1 million whole life cover on Joe's life with a level premium shows that Joe would have to pay N$ 261,00 per month for the required cover.
Joe is interested in knowing if, should he decide not to take out the life cover and instead invest the premium he would have paid towards the life cover, what returns he would need to get on his investment to be in the same position.
This situation is outlined in the following table: Monthly Return needed Dies at Age Premium to equal Paid life cover 40 (5 years on) 261,00 123,62% 45 (10 years on) 261,00 51,8% 55 (20 years on) 261,00 21,26% 65 (30 years on) 261,00 12,37% 75 (40 years on) 261,00 8,3% It is therefore clear that even if the life cover is looked at as an investment that will last for Joe's expected lifetime, it still delivers a competitive return. Whilst the return generated by life insurance is one important aspect when considering the value for money of life insurance, there is also another very important aspect to consider - the fact that nobody is exactly sure when he/she is going to die.
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This is where life cover really offers a cost effective solution to create the capital needed by the life insured's dependants. If, in our example, Joe should die in a car accident three months after having taken out his life insurance, he would receive N$1 million in return for total premiums paid of N$783,00 - a very sound investment indeed! A different way of looking at this is to say that Old Mutual in return for N$261,00 per month carries the risk of Joe dying prematurely, instead of Joe's family having to carry that risk.
NOTE: LIFE INSURANCE IS INDEED A WISE INVESTMENT SPECIALLY THOSE WITH DEPENDENTS.
From what we have highlighted above it is obvious that to extract maximum value from your insurance portfolio, your portfolio needs to be based on a proper analysis of your needs.
These needs must be reviewed regularly. For further information and advice tailored to suit your unique needs, please call your Old Mutual Namibia financial adviser or broker -This article was contributed by Mathys du Preez (Manager: Retail Advice) Centre - Old Mutual Namibia
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
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Namibia: Life Insurance, Rip-Off Or Pay-Off?
The Namibian (Windhoek)
Email This Page
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Comment on this article
The Namibian (Windhoek)
COLUMN
30 June 2008
Posted to the web 30 June 2008
Windhoek
Seeing the value in life insurance is often, as is the case with many intangible goods, somewhat difficult at first glance.
For example, life insurance that pays out when the insured life dies. Many people believe they will never get anything back in return for their premiums. A closer look, however, quickly shows that this is not true.
NOTE: STUDY OF LIFE INSURANCE IS HIGHLY RECOMMENDED.
In qualifying this statement, it is important to take into account that life cover generally takes on one of two forms - the one form is term insurance which will only pay out the contracted life cover should the person whose life is insured die within the agreed time period for which the cover is taken out.
The other form is whole life insurance which pays out the contracted life cover at whatever point in time the life insured dies.
It is thus clear that if a whole life policy is maintained, at some future time there will be a payoff.
The premium payable for term cover is less than for whole life cover, all other things being equal.
Whether you select a term insurance option or a whole life insurance option should be determined by the need you are attempting to address - if life cover is only needed for a very specific period of time (e.g. for bond cover where it is known in what period the bond will be repaid and there is no additional need for life cover after repayment of the bond) term cover might suffice, but as a general rule it is better and wiser to take out whole life cover.
NOTE: IT IS ALSO IMPORTANT TO LISTEN TO STORIES OF THOSE WHO GOT INSURANCE.
A short example to illustrate the value of taking out whole life insurance is outlined below: Joe is a 35 year old male accountant with a wife and two children.
Joe's financial adviser has done a capital needs analysis for him, from which it is evident that Joe's dependants would require N$1 million capital to replace the loss of income his family would suffer should he die today.
A quotation for N$1 million whole life cover on Joe's life with a level premium shows that Joe would have to pay N$ 261,00 per month for the required cover.
Joe is interested in knowing if, should he decide not to take out the life cover and instead invest the premium he would have paid towards the life cover, what returns he would need to get on his investment to be in the same position.
This situation is outlined in the following table: Monthly Return needed Dies at Age Premium to equal Paid life cover 40 (5 years on) 261,00 123,62% 45 (10 years on) 261,00 51,8% 55 (20 years on) 261,00 21,26% 65 (30 years on) 261,00 12,37% 75 (40 years on) 261,00 8,3% It is therefore clear that even if the life cover is looked at as an investment that will last for Joe's expected lifetime, it still delivers a competitive return. Whilst the return generated by life insurance is one important aspect when considering the value for money of life insurance, there is also another very important aspect to consider - the fact that nobody is exactly sure when he/she is going to die.
Relevant Links
Southern Africa
Banking and Insurance
Economy, Business and Finance
Namibia
This is where life cover really offers a cost effective solution to create the capital needed by the life insured's dependants. If, in our example, Joe should die in a car accident three months after having taken out his life insurance, he would receive N$1 million in return for total premiums paid of N$783,00 - a very sound investment indeed! A different way of looking at this is to say that Old Mutual in return for N$261,00 per month carries the risk of Joe dying prematurely, instead of Joe's family having to carry that risk.
NOTE: LIFE INSURANCE IS INDEED A WISE INVESTMENT SPECIALLY THOSE WITH DEPENDENTS.
From what we have highlighted above it is obvious that to extract maximum value from your insurance portfolio, your portfolio needs to be based on a proper analysis of your needs.
These needs must be reviewed regularly. For further information and advice tailored to suit your unique needs, please call your Old Mutual Namibia financial adviser or broker -This article was contributed by Mathys du Preez (Manager: Retail Advice) Centre - Old Mutual Namibia
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
Share this on:
Digg
Del.icio.us
StumbleUpon
Muti
Copyright © 2008 The Namibian. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here.
Make allAfrica.com your home page | RSS Feed
Top | Site Guide | Who We Are | Advertising | Search | Subscribe
Questions or Comments? Contact us. Read our Privacy Statement.
HOME
allAfrica.com
Relevant Links
Southern Africa
Banking and Insurance
Economy, Business and Finance
Namibia
Centenary Bank Goes to Masaka
Govt to Probe All Banks Over Corruption Scandal
Co-Op Bank Doubles IPO Target to Sh10 Billion
Intercontinental Bank Debuts in UK
Banks Use Depositors' Money to Buy Forex
Today's Most Active Stories
* Most Read
* Most Commented
* Most Emailed
1. Zimbabwe: BBC, Stop Fanning Flames of War
2. Zimbabwe: Consensus Grows on Negotiated End to Crisis
3. Zimbabwe: Odinga Calls for AU to Suspend Mugabe
4. Nigeria: G8 Worried Over Country's Nuclear Programme
5. Zimbabwe: Mbeki Backs Mugabe in Hope of Coalition Deal
6. Zimbabwe: Mugabe Now to Crack Down on His Own Party?
7. Uganda: Do Not Play Guitar Music to a Goat's Ears
8. Zimbabwe: Situation Calls for Decisive Action
9. Liberia: President Sirleaf Arrives in Egypt for African Union Summit
10. Somalia: The Ethiopia Military's Puzzling Maneuvers in Central Region
1. Zimbabwe: MDC Tsvangirai's Political Theatrics
2. Zimbabwe: Worried Over Robert Mugabe Vs. the Western World's Press?
3. Zimbabwe: UN Blocks British, U.S. Attempts to Halt Run-Off
4. Zimbabwe: African Union Has Power to Sanction Mugabe
5. Zimbabwe: Opposition Pulls Out of Election
6. Zimbabwe: Tsvangirai - Please Grow Up
7. Zimbabwe: BBC, Stop Fanning Flames of War
8. Zimbabwe: Barack Obama Condemns Mugabe 'Brutality'
9. Zimbabwe: Tories Advocate Military Action Against Country
10. Zimbabwe: South Africa Boosts Election Legitimacy - Report
1. Zimbabwe: BBC, Stop Fanning Flames of War
2. Nigeria: G8 Worried Over Country's Nuclear Programme
3. Uganda: Archbishop Orombi's Priorities Are Wrong
4. Côte d'Ivoire: American Embassy's National Daily Press Review
5. Ethiopia: Political Landscape Worrying
6. Zimbabwe: No Support for UN Arms Embargo By China
7. Sudan: New UN-AU Chief Mediator for Darfur Appointed
8. Ghana: Scholarship Facility for ICT Students
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Friday, June 13, 2008
ASSET PROTECTION IMPORTANT PART OF PLANNING
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Last week, I began my discussion of asset protection. In Florida, property owned by both spouses and purchased by both spouses while married is considered tenancy by the entireties property, which is not subject to the debts of one spouse. Many couples rely on tenancy by the entirety property as their primary source of asset protection. However, reliance on this concept may be misplaced.
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First, a creditor may be able to obtain a judgment against both spouses and then be able to collect from their joint assets. For example, perhaps the spouse works as the bookkeeper for the business and is listed in the Secretary of State's records as the assistant treasurer of the business in order to be able to write checks. The disgruntled plaintiff could then sue both spouses as officers of the corporation. Or perhaps the automobile is owned in joint name, subjecting any vehicle accident caused by either spouse to liability for both spouses as owners of the car or truck. Each spouse should be the sole owner of the vehicle he or she drives in order to insulate the other spouse from liability. If both spouses are sued, tenancy by the entirety property will offer no protection from judgment creditors.
Second, what if the non-debtor spouse dies while the action is pending against the debtor spouse? What if the non-debtor spouse dies while the plaintiff is able to pursue the collection of the judgment for the 20 years the judgment may remain on the record? If the couple becomes divorced, any outright disposition of property received by the debtor spouse will be lost to the judgment creditor. If a parent of the debtor spouse dies, without a proper dynasty trust, any inheritance left outright to the debtor will be lost to the creditor. What if the law changes to weaken tenancy by the entireties protection?
NOTE: ASPECT OF ASSET ALLOCATION MUST BE STUDIED CAREFULLY.
This raises another aspect of asset protection called entities planning. When deciding how to organize your business or how to own investment property, the attorney should educate the client on the amount of asset protection that various business entities afford. Conducting your business as a sole proprietorship has no asset protection. Conducting your business as a general partnership not only offers no asset protection, but may obligate a partner for the mistakes and liabilities of their other partner.
Conducting your business as a corporation may offer some asset protection for inside liabilities. If, for example, an employee in a home remodeling corporation causes a work-related vehicle accident, the injured party can collect against the assets owned by the corporation but not from the outside investments of the owners or shareholders of the corporation, unless there is independent liability or wrongdoing by the owner or shareholder. Whether the corporation is a Sub-S corporation or a traditional C corporation does not matter. That distinction is relevant only to the manner of paying income taxes. The problem is if an owner has a judgment entered against him or her for wrongdoing that has nothing to do with the business, called an outside liability, the creditor may eventually seize the stock of the corporation owned by that person and take control of the business, even liquidating the business to pay off the judgment. Corporate ownership offers no protection from outside liabilities.
If the business is conducted as a Limited Liability Corporation, or LLC, or by a Family Limited Partnership, or FLP, there is some protection from outside liabilities. A judgment creditor who obtains a judgment against one of the owners of a LLC or a FLP is limited to obtaining a charging order against the partnership. The law says that a partnership cannot be forced to accept an unwanted person as the partner. The charging order is like a lien on distributions only when the partners elect to make a distribution, but cannot force the partners to make distributions. If the creditor obtains a judgment, they must wait to collect until the partners make a distribution to the partners, which could be many years. This inability to collect may bring about a more favorable settlement.
The charging order protection does not protect from inside liabilities. For example, if a person is injured in a store or rental home, the owner may be sued. If the store or rental is owned by a LLC or FLP, the assets of the entity are liable for any judgment. Good entity planning would be to have every store or every rental owned by a separate LLC. If one LLC is sued, the other stores or rental homes owned by other LLCs would not be at risk, as long as the formalities of the entity are followed and there is no co-mingling among the entities. Hot assets, such as boats or airplanes, are often owned by a separate LLC and each LLC is owned by a FLP. Each LLC can be set up with very little equity if the equity is borrowed out by the FLP or individual owner of the LLC, called equity-stripping. The owner of the LLC can be an offshore trust set up in a jurisdiction which makes penetration by U.S. courts more difficult. In 10 states, an individual may use an irrevocable asset protection trust which allows persons to place their assets beyond the reach of their creditors during their lifetime. At present, Florida does not have legislation to allow this method of asset protection.
Some have suggested that even tenancy by the entireties property can be owned by a LLC or FLP, so that if the tenancy by the entirety property is compromised by law change, by death of one spouse or by divorce, there would at least be charging order protection.
Although the primary purpose of leaving assets at death in a dynasty trust is to make sure the assets are not added to the size of the beneficiary's estate for estate tax purposes, the dynasty trust also provides asset protection for future generations, although not for the trustmaker. For example, if a widow or widower leaves his or her $2 million estate to his or her two children, and if either child already has his or her own estate in excess of the $2 million lifetime exclusion, or unified credit amount, the extra million inherited would cause more than $450,000 in estate tax when the child dies and leaves the estate to the grandchild, under present law. This tax can be avoided if the funds are not left outright to the child, but instead left in a dynasty, or generation skipping trust.
Because the trust is designed to avoid the assets being considered the assets of the beneficiary for future estate tax and generation skipping tax purposes, by making the assets available only in the discretion of the trustee on an ascertainable standard, the assets cannot be seized by judgment creditors of the beneficiary. The assets are also protected from divorce proceedings or the bankruptcy of the beneficiary. Upon the death of the trustmaker, the surviving spouse may also receive this asset protection for assets passing through the family or by-pass trust. Anyone considering a revocable trust for estate planning should ask the attorney to explain the important benefits of this asset protection planning for a spouse and children.
Another type of asset protection for the assets of a disabled person is the d(4)a special needs trust authorized by federal law, about which I have written extensively in past articles, available through the archives section of www.news-press.com.
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Asset protection important part of planning
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Last week, I began my discussion of asset protection. In Florida, property owned by both spouses and purchased by both spouses while married is considered tenancy by the entireties property, which is not subject to the debts of one spouse. Many couples rely on tenancy by the entirety property as their primary source of asset protection. However, reliance on this concept may be misplaced.
Advertisement
First, a creditor may be able to obtain a judgment against both spouses and then be able to collect from their joint assets. For example, perhaps the spouse works as the bookkeeper for the business and is listed in the Secretary of State's records as the assistant treasurer of the business in order to be able to write checks. The disgruntled plaintiff could then sue both spouses as officers of the corporation. Or perhaps the automobile is owned in joint name, subjecting any vehicle accident caused by either spouse to liability for both spouses as owners of the car or truck. Each spouse should be the sole owner of the vehicle he or she drives in order to insulate the other spouse from liability. If both spouses are sued, tenancy by the entirety property will offer no protection from judgment creditors.
Second, what if the non-debtor spouse dies while the action is pending against the debtor spouse? What if the non-debtor spouse dies while the plaintiff is able to pursue the collection of the judgment for the 20 years the judgment may remain on the record? If the couple becomes divorced, any outright disposition of property received by the debtor spouse will be lost to the judgment creditor. If a parent of the debtor spouse dies, without a proper dynasty trust, any inheritance left outright to the debtor will be lost to the creditor. What if the law changes to weaken tenancy by the entireties protection?
NOTE: ASPECT OF ASSET ALLOCATION MUST BE STUDIED CAREFULLY.
This raises another aspect of asset protection called entities planning. When deciding how to organize your business or how to own investment property, the attorney should educate the client on the amount of asset protection that various business entities afford. Conducting your business as a sole proprietorship has no asset protection. Conducting your business as a general partnership not only offers no asset protection, but may obligate a partner for the mistakes and liabilities of their other partner.
Conducting your business as a corporation may offer some asset protection for inside liabilities. If, for example, an employee in a home remodeling corporation causes a work-related vehicle accident, the injured party can collect against the assets owned by the corporation but not from the outside investments of the owners or shareholders of the corporation, unless there is independent liability or wrongdoing by the owner or shareholder. Whether the corporation is a Sub-S corporation or a traditional C corporation does not matter. That distinction is relevant only to the manner of paying income taxes. The problem is if an owner has a judgment entered against him or her for wrongdoing that has nothing to do with the business, called an outside liability, the creditor may eventually seize the stock of the corporation owned by that person and take control of the business, even liquidating the business to pay off the judgment. Corporate ownership offers no protection from outside liabilities.
If the business is conducted as a Limited Liability Corporation, or LLC, or by a Family Limited Partnership, or FLP, there is some protection from outside liabilities. A judgment creditor who obtains a judgment against one of the owners of a LLC or a FLP is limited to obtaining a charging order against the partnership. The law says that a partnership cannot be forced to accept an unwanted person as the partner. The charging order is like a lien on distributions only when the partners elect to make a distribution, but cannot force the partners to make distributions. If the creditor obtains a judgment, they must wait to collect until the partners make a distribution to the partners, which could be many years. This inability to collect may bring about a more favorable settlement.
The charging order protection does not protect from inside liabilities. For example, if a person is injured in a store or rental home, the owner may be sued. If the store or rental is owned by a LLC or FLP, the assets of the entity are liable for any judgment. Good entity planning would be to have every store or every rental owned by a separate LLC. If one LLC is sued, the other stores or rental homes owned by other LLCs would not be at risk, as long as the formalities of the entity are followed and there is no co-mingling among the entities. Hot assets, such as boats or airplanes, are often owned by a separate LLC and each LLC is owned by a FLP. Each LLC can be set up with very little equity if the equity is borrowed out by the FLP or individual owner of the LLC, called equity-stripping. The owner of the LLC can be an offshore trust set up in a jurisdiction which makes penetration by U.S. courts more difficult. In 10 states, an individual may use an irrevocable asset protection trust which allows persons to place their assets beyond the reach of their creditors during their lifetime. At present, Florida does not have legislation to allow this method of asset protection.
Some have suggested that even tenancy by the entireties property can be owned by a LLC or FLP, so that if the tenancy by the entirety property is compromised by law change, by death of one spouse or by divorce, there would at least be charging order protection.
Although the primary purpose of leaving assets at death in a dynasty trust is to make sure the assets are not added to the size of the beneficiary's estate for estate tax purposes, the dynasty trust also provides asset protection for future generations, although not for the trustmaker. For example, if a widow or widower leaves his or her $2 million estate to his or her two children, and if either child already has his or her own estate in excess of the $2 million lifetime exclusion, or unified credit amount, the extra million inherited would cause more than $450,000 in estate tax when the child dies and leaves the estate to the grandchild, under present law. This tax can be avoided if the funds are not left outright to the child, but instead left in a dynasty, or generation skipping trust.
Because the trust is designed to avoid the assets being considered the assets of the beneficiary for future estate tax and generation skipping tax purposes, by making the assets available only in the discretion of the trustee on an ascertainable standard, the assets cannot be seized by judgment creditors of the beneficiary. The assets are also protected from divorce proceedings or the bankruptcy of the beneficiary. Upon the death of the trustmaker, the surviving spouse may also receive this asset protection for assets passing through the family or by-pass trust. Anyone considering a revocable trust for estate planning should ask the attorney to explain the important benefits of this asset protection planning for a spouse and children.
Another type of asset protection for the assets of a disabled person is the d(4)a special needs trust authorized by federal law, about which I have written extensively in past articles, available through the archives section of www.news-press.com.
NOTE: IMPORTANT TO LEARN FROM TAX ATTORNEY.
-William Edy is a tax attorney, a certified financial planner and a certified elder law attorney in Lee County. He may be contacted online for article ideas and questions. Since e-mail is not secured, do not send confidential information by e-mail. This article should not be a substitute for advice from your own attorney.
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