Posts by Dan Madden, CFP®

Student Question: Hi Dan! I think I’m confused on my terminology. I always thought non-qualified plans were: SERP’s, Executive Deferred Comp., 457 Plans, etc. But in Lesson 1 of the Retirement Planning section, I see that IRA’s, SEP’s, 403(b)’s are considered “non-qualified plans.” Am I mixed up about this? Instructor Response: Hi Margie! I hope…

Student Question from EtebeCourse:  Estate Planning Student Question: Good evening, #7 on the review question…why would four business associates with equal partnership be tenants in common? I thought it would be JTWROS as their interest is equal and undivided. Thanks. 7.     An investment by four business associates, each wishing to contribute 25% of the purchase price. 100%…

Student Question from Margie LCourse:  Insurance Planning Student Question: Insurance policy dividends may be taxable if they are paid in cash to the policy owner, but what about dividends that remain in the policy to purchase additional coverage (Paid-Up Additions)? Are those dividends non-taxable as long as the coverage is not lapsed or surrendered? Instructor Response:…

Student Question from Ryan FCourse:  Estate Planning Student Question: Hi Dan,  I have a question about an estate planning concept.  I think I’m just reading it wrong, but I want to make sure I have a clear understanding.  What is the correct answer to this question, and why? A husband and wife wish to reduce the size…

Student Question from Mark PCourse:  Insurance Planning Student Question: In the question below, if the ACV had been over $300,000, would she have received that amount?  I know the correct answer is $281,250, but what if the ACV had been over $300,000? Jill owns a home that has a market value of $500,000, a replacement value…

Student Question from Natalie PCourse:  Insurance Planning Student Question: Hello! I am looking at question #2 that discusses the “contribution by equal shares” rule. However, I do not understand how they are getting the answer. 10% of $120,000 is $12,000 (not $25,000). Can you please explain? Thanks! Question 2 Three companies insure Josh’s $250,000 house. Insurer…

Student Question from Greg CCourse:  Estate Tax Planning Student Question: Dan, The assets in a QTIP trust are automatically included in the surviving spouse’s estate, correct? Thanks, Greg Instructor Response: Hi Greg! Terminal interests are NOT normally included in the beneficiary’s estate. However, the IRS makes a special exception to “Qualify” (hence, QTIP for “Qualified” instead…

Student: Question from Stacey CCourse:  Insurance Student Question: Review Question #5 (shown below) deals with Coinsurance. In the answers, it shows the coinsurance equation to be [(the insured amount/(.80 x replacement cost)] x AMOUNT INSURED.  Is it “amount insured” or “replacement cost of loss” because those amounts are different. Please provide clarification. Thanks. Question 5: Jill…

Student Question from JohnathonCourse:  Income Tax Planning Student Question: Good Afternoon: I am confused by the answer for the question below. It indicates that one of the correct responses is that the family members of the deceased will receive cash from the life insurance policies. The way I understand the Buy-Sell Agreement process is that the…