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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…
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…
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…
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…
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…
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…
Solving for Annual Equivalent Rate
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: Hi- I am confused as to how to get the correct answer for number 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7% compounded monthly, what is the annual equivalent rate? Round your answer to two decimal places.…
Income Taxation of Disability Payments
Erika wants $50,000 a year in today’s dollars in retirement. She anticipates retiring in 10 years and living in retirement for 30 years. Erika can earn 7% on her investments and she expects inflation to average 4%. Approximately how much should Erika have saved by the day she retires to meet this goal? $913,000 $983,000…
BENEFITS OF BECOMING A CFP® PROFESSIONAL
CFP® Certificants in the News Successfully passing the CFP Board exam and meeting the other certification requirements is cause for celebration, especially for intrepid career changers. Certification in hand, the next challenge for many is building a career. CFP Board recognizes this challenge and offers a starting point. According to CFP Board’s resource entitled WHY…