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John Skabelund – Partner

The MPI Plan enables you to purchase a life insurance policy on yourself to create a tax free retirement income and a death benefit for your beneficiaries.  However, without a Legacy Trust owning the plan, there are significant limitations, such as:

  • Typically you are unable to purchase a MPI Plan on the life of someone other than your spouse or child.
  • When you purchase a MPI Plan on the life of your spouse, child, or anyone else, they own the policy – not you.  This means your child may withdraw the income and principal from the MPI Plan and you are not entitled to the income or assets.
  • Upon your death, the death benefit of your MPI Plan pays out to the named beneficiary.  The beneficiary may then do whatever they wish with the death benefit.
  • Although life insurance proceeds are typically protected from your beneficiary’s creditors upon their initial receipt, the funds become subject to the beneficiary’s creditors, lawsuits and bankruptcy.  The proceeds can also disqualify the beneficiary from government aid programs and become subject to a beneficiary’s divorce.
  • The cash value of the MPI Plan will count towards your Federal Estate Tax exemption amount.  Everything you own that exceeds the Federal Estate Tax exemption amount will be assessed an estate tax.  Currently the estate tax rate is 40%.  In other words, your house, bank accounts, vehicles, MPI Plan and everything else you own when you die will currently be taxed if it exceeds the Federal Estate Tax exemption amount.  This amount is currently at $11.7 million in 2021.  However, not only will this amount decrease to $5 million in 2026, President-elect Joe Biden proposes to lower this further to $3.5 million per person.
  • Upon your death, your beneficiary may spend the MPI Plan’s proceeds and death benefit any way he or she wishes.  In other words, what you have worked hard to create may end in the next generation.  There is no guarantee that future generations will further invest in MPI Plans.  

Suncor Financial provides its clients with exclusive access to the Legacy Trust created by attorney W. John Skabelund at Davis Miles McGuire Gardner, PLLC (“DMMG”).  DMMG is the 6th largest law firm in Arizona.  Award winning attorney, John Skabelund, has created a revolutionary trust for MPI Plans called the Legacy Trust.  Mr. Skabelund is not only an experienced estate planning attorney, he too is a Suncor Financial client with his own MPI Plan and Legacy Trust.  

Suncor Financial is proud to introduce the Legacy Trust to enable its clients to maintain control and protect their MPI Plan after death.  The Legacy Trust continues to manage the MPI Plan by someone you designate.  Your MPI Plan can continue blessing generations rather than ending when you die.

DMMG offers four different Legacy Trusts for you to choose from.  They are:

The trust that started it all.  Designed specifically for MPI Plans enabling you to name: (1) who will manage the MPI Plans upon your incapacity or death; (2) who will inherit; and (3) how much and when your loved ones will receive funds from the trust.  It is designed to protect the MPI Plan from your loved one’s creditors, lawsuits, bankruptcy, divorce and government aid programs.  With their cooperation, the Basic Legacy Trust enables you to invest in MPI Plans on the lives of descendants while you retain the income and control of the MPI Plan.  The Basic Legacy Trust can invest its funds into additional MPI Plans for your loved ones too. Mr. Skabelund normally charges $290 for his initial consultation and $5,000 for a trust with similar features.  However, Suncor Financial clients receive a free consultation and pay only $1,500.

This trust has all the features of the Basic Legacy Trust with one important twist.  Rather than designate specific amounts to each child or loved one, this trust is designed to last multiple generations creating a long lasting legacy.  Authors Garrett B. Gunderson and Michael G. Isom explain in their groundbreaking book, What Would the Rockefellers Do?: How the Wealthy Get and Stay That Way … And How You Can Too, that although the Vanderbilt and the Rockefellers had comparable wealth, they had two very different trusts.  The Vanderbilts had a trust similar to the design of the Basic Legacy Trust; meaning each successive generation received a specific share.  This motivated each generation to spend.  Within three generations the Vanderbilt empire was depleted.  On the other hand, the Rockefellers’ trust continues strong today and has blessed countless descendants of John D. and Laura Spelman Rockefeller.  The Dynasty Legacy Trust does not split into specific shares, but rather typically names all descendants as beneficiaries.  You create rules to which your descendants may receive funds from the trust.  Common examples include paying for education, medical bills, a wedding, a down payment on a house, a specific percentage of income may be distributed, etc. This trust also creates a family bank as described in the book.  Based upon terms and conditions you create, beneficiaries may borrow money from the trust.  The Dynasty Legacy Trust is designed to continue to grow, even investing in additional MPI Plans for your descendants! Mr. Skabelund will meet with you for approximately one additional hour beyond the initial consultation to design the rules and management of your Dynasty Legacy Trust.  He normally charges $10,000 or more for a dynasty trust.  However, Suncor Financial clients pay only $3,500.

MPI Plans are phenomenal at creating wealth.  Unfortunately, if your assets exceed the Federal Estate Tax exemption amount, your estate will be assessed an estate tax.  In other words, the fair market value of your home, cash, securities, retirement plans, vehicles, business interests, real estate, personal property and even your MPI Plan will be included in your taxable estate.  The Federal Estate tax rate is currently 40%. (It was 55% in 2001.  Some states also charge an estate and inheritance tax too. Maryland, the highest, currently has a 16% rate.)  In 2021, the Federal Estate Tax exemption is $11.7 million per person or a combined $23.4 million for married couples.  This means that currently a single person’s estate will be taxed at the Federal Estate tax rate of 40% on everything exceeding $11.7 million. ($23.4 million per couple.)  However, the Federal Estate Tax exemption amount can vary.  The current rate is schedule to drop to $5 million per person in 2026.  In 2001, the exemption amount was $675,000 and was only $1.5 million as recently as 2005.  Clients seeking to reduce their estate tax to the greatest extent possible place their MPI Plans in the ILIT Legacy Trust at the outset.  Such a strategy not only removes the initial investment out of their taxable estate, but also all future investments and MPI Plan’s growth.  The result can mean millions saved in estate taxes.  Mr. Skabelund typically charges $5,000 for an ILIT (an irrevocable life insurance trust).  Suncor Financial clients pay $3,500 and this price includes an ILIT Legacy Trust for both spouses at this price too. (Each spouse owning a MPI Plan will need an ILIT Legacy Trust.  Be aware that there are some constraints with an ILIT that may not make it a viable option for some clients.)

The ILIT Dynasty Legacy Trust combines the benefits of both the Dynasty Legacy Trust and the ILIT Legacy Trust.  It not only creates a trust that will manage and grow your MPI Plans for multiple generations like the Rockefellers, but also avoid estate taxes too.  It truly is the best of both worlds.  Suncor Financial clients receive a reduced price of $4,500.

is an option to consider if you are creating a MPI Plan for a child or grandchild, do not need the income or death benefit from the plan and desire to prevent the MPI Plan from being included in your Federal Estate Tax exemption amount.  A MPI Gift Trust gives you the assurance that your gift will be used for the MPI Plan and protected from your loved one’s creditors, lawsuits, divorce and government aid programs.  You are also able to insert requirements on the management and distributions of the MPI Plan.  If your investment is at or below the current annual exclusion amount of $15,000 per year, the gift will not count towards your Estate Tax exemption either.  An irrevocable gift trust is typically $5,000.  However, Mr. Skabelund offers the MPI Gift Trust only to Suncor Financial clients at $2,000. 

Whichever option you choose, a Legacy Trust exists to meet your goals today and in the future. However, there are advantages and disadvantages of each option.  Mr. Skabelund will educate you as to which trust is right for you.

An additional benefit to each of the Legacy Trusts is that it provides for the smooth management of your MPI Plan if you are unable to manage your financial affairs due to mental incapacity, such as a stroke, dementia, Alzheimer or an accident.  Your Legacy Trust can prevent the need for a conservatorship, which typically costs thousands of dollars and must be renewed each year.

Key benefits of a Legacy Trust are the ability:

  1. To purchase MPI Plans on the lives of your descendants.  (Children and grandchildren can qualify for your income!)
  2. For you or someone you name to control all the MPI plans in your Legacy Trust during your life and after you die.
  3. To protect your wealth from your loved one’s creditors, lawsuits, bankruptcy, divorce and government aid qualifications.
  4. To reduce estate taxes for you and your descendants.  
  5. To continue purchasing additional MPI plans for generations.
  6. To create wealth for generations rather than just your children or immediate heirs.

Schedule your consultation today!

You should seek independent tax counsel regarding your estate and gift taxes in your state.