June 21, 2016

Our agent, Judy, sold a Medicare Supplement to a husband and wife who farm. Judy knows that it always pays to ask questions, and found out that they have 1,200 acres - valued at over $12,000,000. They have additional assets as well, such as savings, annuities, their home, other property, etc.

Life with LTC

During their conversation, Judy uncovered a need that they were very concerned about. They have two daughters and a son, who does all the farming and will eventually take over the farm.

Did you hear the one about the farmer’s daughters?

Neither of the daughters has any interest in running or working on the farm. If the son will inherit the farm, how can the couple provide their daughters with some sort of “fair share” or equalization?

How can the couple set up their estate to pay as little as necessary in taxes, and pass more of an inheritance to their children?

Life Insurance to the rescue

Life insurance - specifically a survivorship policy - is a great option in many cases. Judy asked for our help in designing a case.

We determined that a survivorship policy could be used as part of an estate plan, so that when both the husband and wife have passed away, the son will receive the farm, and the daughters each receive money from the life insurance policy. This helps to ensure that each child receives an equal inheritance.

As for estate taxes, life insurance proceeds are income tax-free.

This case worked out as follows:

  • Male, age 70 & Female, age 68
  • $2,000,000 life policy
  • $27,000 annual premium (paid by the farm corporation)
  • HUGE COMMISSIONS - Over $23,000!

Don’t hesitate to ask your farm clients about succession planning. It can be hugely beneficial to them and to you. And remember, you don’t need to know everything about life insurance. We can walk you through the entire case, and the commission is yours!

A helpful fact-finder

John Hancock Life Insurance Company has created an Estate Planning Fact Finder that you might find helpful.

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