Page 5 - Leverage Magazine Issue July 2021
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UA
H Y P O T H E T I C A L
C A S E S T U D Y
A N E W Y O R K M E T R O A R E A
C O N S T R U C T I O N C O M P A N Y
P L A N S F O R T H E I R F U T U R E
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THE SOLUTIONS to read on website.
p d a t e d b u y - s e l l a g r e e m e n t
S t r u c t u r e d G o l d e n - H a n d c u f f s a n d i n f o r m a l l y f u n d e d
t h e a g r e e m e n t
P a r t o f t h e b u y - o u t a n d d e f e r r e d c o m p e n s a t i o n w e r e
c o v e r e d b y C o r p o r a t e O w n e d L i f e I n s u r a n c e w i t h C a s h -
V a l u e c o u n t i n g t o w a r d s s u r e t y b o n d c a p i t a l
r e q u i r e m e n t s
K e y - P e r s o n I n s u r a n c e p o l i c y p u t i n p l a c e
E s t a b l i s h e d C a s h - B a l a n c e p l a n t o b o l s t e r p r e - t a x
r e t i r e m e n t s a v i n g s , a n d p u r c h a s e r e m a i n i n g d e a t h
b e n e f i t
( t a x - d e d u c t i b l e ) i n s i d e t h e p e n s i o n p l a n t o f u l l y
s a t i s f y
B u y - S e l l A g r e e m e n t
THE RESULTS
T e r m i n s u r a n c e c o s t r e c a p t u r e d .
K e y e m p l o y e e s h a v e m o r e i n c e n t i v e t o s t a y l o n g - t e r m
a n d t h r o u g h a t r a n s i t i o n .
C o m p a n y p r o t e c t e d a g a i n s t k e y - m a n r i s k
C o m p a n y b a l a n c e s h e e t r e l a t i v e l y u n a f f e c t e d
A p p x . $ 4 0 0 , 0 0 0 p e r y e a r c o n t r i b u t e d t o w a r d s c a s h
b a l a n c e p l a n , P R E - T a x , w i t h 8 6 % o f f u n d s g o i n g t o
o w n e r s h i p a n d a h a n d f u l o f k e y e m p l o y e e s . O l d e r
o w n e r b u i l d i n g m o r e a s s e t s f o r r e t i r e m e n t a n d c a n
p r o v i d e m o r e f l e x i b i l i t y t o b u y - o u t t e r m s i n 5 - 7 y e a r s
B u y - S e l l a g r e e m e n t f u l l y c o v e r e d i n t h e e v e n t o f
d e a t h a n d d i s a b i l i t y .
G r o u p u n d e r w r i t i n g t o m a n a g e u n d e r w r i t i n g c o n c e r n s
f o r s o m e o f t h e e x e c u t i v e s i n t h e c o m p a n y i n s i d e
c o r p o r a t e o w n e d l i f e i n s u r a n c e .
**Hypothetical example used for illustrative purposes only. Actual
results will vary and may not be as favorable. Some life insurance
examples used subject to financial and medical underwriting.
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T H E A R I S G A R D E A D V A N T A G E J U L Y 2 0 2 1
Securities offered through Lion Street Financial, LLC. (LSF), member FINRA & SIPC. Investment Advisory Services offered through Lion Street Advisors, LLC. LSF is not affiliated with ArisGarde.