Blog
Skewness versus Kurtosis
Course: Investment PlanningLesson 13: Asset Allocation Student Question: Hi- Can you help me understand the difference between Kurtosis and Skewness? I can’t quite piece it together. Thanks Meg Instructor Response: Hi Meg, Entire books have been written on this topic but the following summary should get the points for you on the CFP® Board exam…
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Defined Benefit Plan Reversion Tax
Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…
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How to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part II
Good to Know This blog is the second of a three-part series that includes: Part I: Reducing the IRS valuation (but not the real value) of Client Assets, Part II: Creative Use of Installment Sales and Specialized Trusts, and Part III: Using Annuities, Charitable Trusts, and Other Techniques. Background-Eliminate Transfer Taxes This blog combines the…
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Unused Premium
Course: Insurance PlanningLesson 8: Gift and Estate Valuation Student Question: Hi- Could you please clarify for me what the unused premium would be in term life insurance? I don’t quite understand how you could not use the premium. Thanks. Thanks John Instructor Response: Hi John, Certainly. A lot of different terms in insurance, to be…
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Deductibility of CEO Compensation
The CEO of Branyan Corporation, a publicly traded corporation, is paid a $3 million salary in the current year. How much of this is deductible by Branyan as a business expense? All $3 million. Salaries are a deductible expense. Salaries for senior executives are never deductible. $1 million. Annual compensation paid to the CEO of…
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ARE FINANCIAL ADVISORS READY FOR THE “ADVICE REVOLUTION?”
CFP® Certificants in the News According to a CFP Board article dated December 21, 2021, “The shift in wealth management toward financial advice and financial planning is undeniable. From managing the change in consumer expectations to recognizing the significant value that financial planners offer, many financial firms have accelerated their adoption of business models that…
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Treasury Stock in Entity Method of Buy-Sell Agreement
Course: Insurance PlanningLesson 17: Stock Redemption/Entity Plan Student Question: Hi- Interesting study here; I see using this method, the entity buys out the estate, and shares are now held by Zion as “treasury stock.” Given the other two living owners own 2/3 of the business, wouldn’t they technically own the treasury stock? A bit confused as…
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Characteristics of a Will
Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2) A will cannot be rewritten but can be amended at any time by a codicil. (3) A will must be signed by the maker and usually must…
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How to Slash Gift, Estate, and Generation-Skipping Transfer Taxes: Part I
Good to Know Your high net worth clients may have two seemingly contradictory goals: Reducing or eliminating gift, estate, and generation-skipping transfer taxes and maintaining control over their net worth. Why do these goals seem contradictory? We have bad news and good news. First, the bad news-the Internal Revenue Code requires that the value of…
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