Unlocking Hidden Value: Life Settlements for High-Net-Worth Clients and Business Owners

Life insurance plays a vital role in estate and wealth planning, but as financial circumstances evolve, existing policies may no longer align with a client’s objectives. For fiduciaries, estate planning attorneys, and wealth advisors working with high-net-worth individuals—as well as business owners—understanding the secondary market for life insurance is essential. In this presentation, we will explore: ? Key legal and fiduciary considerations when evaluating life settlements as a strategic option for clients. ? Tax implications of life settlements, including how the anticipated sunset of the Tax Cuts and Jobs Act (2017) at the end of 2025 may impact planning strategies. ? Navigating the secondary market—how to assess policy value, key factors influencing pricing, and strategies to optimize client outcomes. ? Business-owned life insurance—Many businesses purchase life insurance for buy-sell agreements, debt protection, or executive benefits. As needs change due to ownership transitions or financial shifts, a life settlement can unlock unexpected liquidity instead of letting policies lapse. ? Steps to Mitigate Liability – Corporate trustees can reduce exposure by conducting regular policy reviews, engaging life settlement experts to assess market value, and documenting decision-making. Transparent communication with beneficiaries ensures trust assets are managed prudently and helps prevent disputes. A policy appraisal before clients lapse or surrender their coverage can reveal untapped financial resources and new planning opportunities. By incorporating life settlements into broader estate and business planning discussions, advisors can help clients and business owners maximize the value of their existing assets and achieve their long-term goals.