We’re just about in the middle of all the types of funding your Buy-Sell Plans. So before we get to the heart of the next sgment of funding the Buy-Sell, I thought it would wise to offer a brief summary. This is because the next funding mechanism will consist of about a dozen of different articles. They all hinge on a sepcific triggering event.
You no doubt remember that the triggering event or events are what makes the Buy-Sell Plan become active. Some of the triggering events listed are retirement, company reorganization, bankruptcy, divorce to name a few. It’s important to review Trigering events for two very important reasons. We need to find the most cost efficient way of funding your Buy-Sell. In addition, we need to coordinate the specific triggering event to the most cost efficient funding mechanism.
With that in mind, the vast majority of all triggering events rest in only two areas. First is a premature death. Then there is a short or long term disability. The long term disability could be also referred to as permanent disability. Consequently, we need to find the most cost effective way to fund these two catastropic events. I’m laying the ground-work for the specific triggering event of a premature death. Furthermore, we need to find the most cost efficient way to fund this event. Then beyond that we need to take into consideration the most tax efficient way to handle such an event.