Keeping The Money Together: A Waterfall Effect

The last thing Cornelius Vanderbilt said was, "Keep the money together." What did the Vanderbilt's do with that? The exact opposite. Keeping the money together for a family can seem quite tricky, but it can be broken down to much simpler terms.

For wealthier families keeping the family money intact is very important, but how do you do it? There are a variety of ways to do this, and you don't have to be ultra wealthy to do it. One of the best ways is creating a waterfall effect along family generations.

This requires the use of a trust and participating whole life insurance. We use whole life insurance as it is the most guaranteed, flexible, and strongest product you can have. What happens is:

• You, the parent, have policies on your parents (the grandparents)
• When the grandparents pass away, the death benefits will be put in a trust that has been set up for you (the parents)
• The money now in the trust will pay the premiums for the life insurance on you and your spouse
• When you and your spouse die, the death benefits will go inside the trust again and it will be used to pay the premiums for the children's policies

This cycle will continue until someone withdrawals too much money from the policies, surrenders the policies, or dissolves the trust. All along the way the cash value inside of these policies will be accessible by each generation. We suggest the use of loaning against the policy and having a payback schedule for each loan. By doing this you never deplete the cash value and continue to circulate the money through the policies.

Some of the benefits of this strategy include but are not limited to:

• internal contract cash value accumulation with no investment market risk
• guaranteed increase in cash value (4% guaranteed on cash after cost of insurance)
• guaranteed face amount of life insurance
• non-guaranteed dividends but has been paid for over 150 years (several dividend receipt options)
• non forfeiture provisions of line of credit against the cash value accumulation
• non taxed cash accumulation
• creditor protection of some or all of cash value (the amount of protection is state specific)
• contractual guarantee, if qualified, of annual deposits if insured becomes disabled
• uninterrupted growth and compounding of cash value when funds are activated by policy loan provision against the policy as collateral

If you are a business owner/executive, athlete/entertainer, real estate investor, or an individual/family who earns over $200k, you need to take the time to meet with my team. If you have some of these parts in place already we will review them for free and let you know right away if you are heading in the right direction or not.

If you would like to investigate further to put this in place for your family, please reach out by email, message, or phone call. You can email me at [email protected] or a call/text at 615-397-8799.