SPIA Arbitrage
SPIA Arbitrage is an extremely effective way to reduce your estate tax liability, gain a significant return on your money, establish a guaranteed income for the rest of your life, and leave a tax free inheritance to your loved ones. Though the name may be odd, this program is perfect for anyone over the age of 65 who is blessed to have money they are not living on and would like to gain these benefits.
How does it work?
We use two different insurance contracts. The first contract is a Single Premium Immediate Annuity (SPIA). With a SPIA you deposit a lump sum of money into the account with a AAA-rated insurance company. The company will then guarantee you an income for the rest of your life. Under the Internal Revenue Code (IRC 72), a portion of each annuity payment is considered to be a return of capital, and is excluded from income for federal income tax purposes.
The second contract of this program is to purchase a life insurance policy, which will replace the lump sum used to purchase the SPIA. This accomplishes several things:
- The lump sum is removed from the estate and will be excluded from probate and estate taxes.
- The heirs receive the life insurance proceeds tax-free after the purchaser’s death.
- The estate is preserved.
To learn more about SPIA Arbitrage, download a PDF of the complete description here.