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Private Wealth & Trust

Overview

Jackson's Private Wealth & Trust Group is committed to supporting advisors and trustees as they work to deliver value for clients and their beneficiaries.

Shouldn't Your Trusts Be Growing Faster?

Irrevocable non-grantor trusts represent a tremendous opportunity to grow and protect wealth and transfer it within a family. However, the potential of these trusts often goes unfulfilled. Why? Because trusts are not able to accumulate value like clients' other assets.

Three key obstacles stand in the way of growth:

  • Distributions
  • Taxes
  • Professional management fees

Distributions, especially in our current tax environment, are frequently leveraged in order to reduce taxes. But taking money out of the trust reduces its ability to grow. If the tax challenges can be resolved, it may be possible to leave more assets in a trust.

Professional management comes with fees, but this service can help optimize the trust opportunity. Moreover, the resulting fees are tax-deductible to the trust. Thus, this obstacle to growth is a necessity that can be somewhat mitigated.

With these two items set aside, we can turn our attention to taxes.


Can Non-Grantor Trusts Avoid Income Tax?

The tax code is designed to obstruct substantial accumulation outside of a taxable estate. This is why trusts are required to pay the highest marginal income tax rates on all earnings that exceed just $12,500.

In order to avoid those confiscatory income taxes, trustees will often distribute applicable earnings out to the family beneficiaries and have them pay taxes within the much wider individual income tax brackets. While this approach can save income taxes, these distributions essentially squander the growth potential of the trust. Earnings are once again subject to estate tax for the family. And once funds leave the trust, they may also leave the oversight of the professional manager.

The Private Wealth & Trust Group at Jackson would like to show you an alternative approach: A variable annuity investment platform that gives you the option to invest in quality sub-accounts that can grow tax-deferred.* This gives the trustee the freedom to determine when taxes on earnings will be paid. And it allows avoidance of trust taxes on earnings, even if they are distributed.

* Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such as a 401(k) or IRA, and may be found at a lower cost in other investment products. It also may not be available if the annuity is owned by a "non-natural person" such as a corporation or certain types of trusts.

Before investing, investors should carefully consider the investment objectives, risks, charges and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses, which are contained in the same document, provide this and other important information. Please contact your representative or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.

This material was prepared to support the promotion and marketing of Jackson® variable annuities. Jackson, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. Please consult your own independent advisor as to any tax, accounting or legal statements made herein.

Variable annuities are issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York, by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Variable annuities are distributed by Jackson National Life Distributors LLC, member FINRA. May not be available in all states and state variations may apply. These contracts have limitations and restrictions including possible withdrawal charges and excess interest adjustments (interest rate adjustments in New York) and recapture charges. Jackson issues other annuities with similar features, benefits, limitations, and charges. Discuss them with your representative or contact Jackson for more information.

Jackson® is the marketing name for Jackson National Life Insurance Company® and Jackson National Life Insurance Company of New York®.

This piece is meant to provide education on the content being presented and is intended of an audience with a basic understanding of trusts and the financial industry. It is not intended for use with the general public.

Firm and state variations may apply.

• Not FDIC/NCUA insured • Not bank/CU guaranteed • May lose value •
Not a deposit • Not insured by any federal agency

CMV18831 09/17

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Jackson National Life Insurance Company
1 Corporate Way
Lansing, MI 48951