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Use a private annuity agreement to eliminate estate taxes & gift taxes,
and to transfer assets from one generation to the next, while you retain
lifetime income from the transferred assets in the USA, Canada, the
Caribbean, Central America, South America, Europe,
Asia, Australia, New Zealand, Africa, or the Middle East!
Definition of Private Annuity – A
private annuity agreement is an effective method of selling
or transferring an asset whereby the seller (“transferor” or “annuitant”)
sells or transfers the asset to the buyer (transferee) in exchange for the
buyer/transferee agreeing to make certain, fixed-amount payments to the seller/annuitant
until the seller dies. To qualify as a private annuity for U.S. tax
purposes, in addition to other requirements, the buyer (obligor to make the
annuity payments) must not be in the business of issuing annuities.
This requirement does not affect non-U.S. residents and non-U.S. citizens.
The transferee can be one or more individuals, a general or limited
partnership, a trust (domestic or overseas), or a corporation (domestic or
overseas).
Thus, the basic essence of a private annuity is that a person, called the
“transferor,” transfers property or money to a second person or trust
(domestic or foreign), called the “transferee,” in exchange for the
transferee’s unsecured promise to pay a lifetime income to the transferor.
If well-written, properly valued, correctly calculated, and properly
implemented, a private annuity can save 100 percent of U.S.A. estate, inheritance taxes
and death taxes, plus 100
percent of gift taxes on the property transferred from the annuitant to the
transferee.
Moreover, there can be income tax savings through: (1) removing
the transferred income-producing property from the ownership of a high-tax
bracket taxpayer to a taxpayer with a lower rate of tax; and (2) spreading
the payments of capital gains taxes over many years [the projected actuarial
life expectancy of the annuitant in years] instead of just the year
of sale.
Persons contemplating the establishment of a private annuity should first
seek professional advice from their attorney and tax accountant as to how a
private annuity may or may not benefit them in their own nation and
individual financial and tax situation.
For a private annuity to be a sound move financially, the transferor should
have a reasonably limited life expectancy either because of age
(e.g., over
55) or poor health.
None of the property transferred will be taxed to the estate of the
transferor (at the death of the annuitant) if the annuity payments end
completely at the death of the annuitant. If payments are for a fixed period
of time extending beyond the annuitant’s death, or if payments continue to a
second annuitant, the discounted (to the value at the date of death) present
day
economic value of such future payments will be included in the
potentially-taxable estate of the annuitant.
To have annuity income go to more than one individual, it is normally better
to arrange separate private annuity agreements so that there will be no
residuary amount subject to estate tax at the death of each separate
annuitant.
The transferor, transferee, and the private annuity itself (along with its
assets) can be in the same nation or split among several legal domiciles
(jurisdictions) such as the USA, Canada, the United Kingdom, Australia, New
Zealand, France, Germany, Italy, or in any other nation, including strong and effective asset
protection havens such as Belize, the Seychelles, or the Cook Islands.
A private
annuity can be lawfully organized and located in the USA or in any other
nation, including asset protection havens like Belize, the Seychelles, or
the Cook Islands.
If the private annuity and its assets are located in another legal
jurisdiction from that of the annuitant, that arrangement can help protect
the private annuity assets from creditor efforts to seize the annuity assets
and to garnish (seize) the annuitant’s private annuity income.
The private annuity agreement should include in its provisions spendthrift
clauses that protect the annuitant’s income from loss to creditors.
The one-time fee to calculate and to form a private annuity agreement is
US$2,000.
If you would like the help is a Certified Tax Consultant in regard to your
enjoying the immense benefits of a well-written and well-planned private
annuity, please contact Phillip Fry. Email:
incometaxplanning@yahoo.com
Phone: 63-919-375-0302 (Philippines) 7 p.m. to 7 a.m. Eastern Time
(USA/Canada).
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