Brice Financial Service

Advisory Services

Advisory Services

How do you pay for a college education, protect family and business interests, and fund a comfortable retirement? A foundation built on a comprehensive suite of insurance and investment products combined with sound financial management that provides value, protection, and performance. Based on your investments objectives, we can help you determine what financial products and services may be suitable for you. You may select a-la-carte from our menu of products and services to personally customize your own insurance and investment portfolio.

We provide advisory services to include facilitating:

  1. Registering a Limited Liability Corporation, Partnership, or S-corporation in the state
  2. Obtaining legal tax status
  3. Obtaining Health, Life, Disability, Ancillary, and business liability insurance
  4. Obtaining 401(k) and IRA plans
  5. Opening business bank accounts and obtaining business credit lines
  6. Opening brokerage accounts
  7. Obtaining Executive Benefits, Buy-sell agreements
  8. Child education planning and charitable planned giving
  9. Coordination with your tax professional for compliance purposes

Investment Management

Our investment management services, through our registered broker-dealer Interactive Brokers, LLC, provide clients with access to 100 market centers in over 24 counties where we attempt to grow your assets. Your financial adviser will review your account, your goals, and make the proper recommendation for your assets, based on your objectives and risk tolerance. We require historical performance indicative of a consistent investment approach and the ability to adhere to stated objectives over time.

For many people, investing typically begins with one stock, bond, or mutual fund. Over time, other selections are added, because most people understand it is imprudent to invest everything in a single security or fund, even if it has a solid reputation. However, just "spreading money around" in a haphazard way may create only the illusion of diversification.

If you have assembled what is known as a "hodgepodge" portfolio, you may be unaware of the extent to which your investments are (or are not) consistent with your objectives. How do you set up a framework that tailors your investments to your particular circumstances?

A sound portfolio management strategy begins with asset allocation—that is, dividing your investments among the major asset categories of equities, bonds, and cash. You can then make finer distinctions within each broad category. For example, within the equity category, you could diversify among large company stocks, small company stocks, international stocks, or an extensive range of mutual and exchange-traded funds. Within the bond category you could separate short-term (10 year) and long-term (30 year) bond investments.

Since various investment categories have unique characteristics, they rarely rise or fall at the same time. Consequently, combining different asset classes can help reduce risk and improve a portfolio's overall return. Still, two nagging questions remain: What factors guide the asset allocation process? How much of a portfolio should go into each category?

To answer the first question, the main objective of asset allocation is to match the investment characteristics of the various investment categories to the most important aspects of your personal risk tolerance, return and liquidity needs, and your time horizon.

Investing according to your risk tolerance will help keep you from abandoning your investment plan during times of market turbulence. One way to assess your risk comfort zone is to ask yourself:

How much of a loss could I withstand in a one-year period and still stay the course?

Finding the appropriate level means balancing your risk tolerance against the different levels of volatility of the various asset classes. For example, low risk tolerance may dictate a portfolio that emphasizes conservative investments while sacrificing the potentially higher returns that usually involve a greater degree of risk.

Return refers to the income and/or growth you expect a portfolio to generate in order to meet your objectives. For example, retirees may prefer a portfolio that emphasizes current income, while younger investors may wish to concentrate on potential growth.

Your personal time horizon extends from when you implement an investment strategy until you need to begin withdrawing money from your portfolio. For example, a short time horizon (less than five years) is probably best served by a conservative portfolio emphasizing safety of principal. On the other hand, the more time you have to invest, the greater the risk you may be able to shoulder, because you have time to recover from market downturns.

Your Final Destination

The short answer to the question regarding how much of your portfolio should go into each category is that asset allocation is more of a personal process than a strategy based on a set formula. Although guidelines do exist to help establish the general framework of a well-diversified portfolio (for example, the need for growth in order to offset the erosion of purchasing power caused by inflation), building an investment portfolio that is right for you involves matching the risk-return tradeoffs of various asset classes to your unique investment profile.

Health Insurance Planning

Health insurance protects you and your loved ones against the risk of incurring substantial medical expenses. Benefits are administered by a central organization such as a government agency, private business, or not-for-profit entity. Your own health is the most important asset you can insure, and the cost of healthcare in the US will continue to increase due to the implementation of the Affordable Care Act of 2010.

Proper health insurance planning is not only essential for families and businesses, it is also required by federal law. We help you understand what the various health insurers offer and how to choose the best plans with the strongest networks that will meet your health needs.

Life Insurance Planning

You can use life insurance to leave much needed income to your survivors, provide for your children's education, pay off your mortgage, simplify the transfer of assets, or make gifts to charities. It replaces wealth lost due to expenses and taxes that may follow your death. The funds provided by life insurance can also help you avoid a forced sale of family treasures and enable beneficiaries to obtain fair value for a family business.

Life Insurance might be thought of as something you do for your beneficiaries. At Brice Financial Services, we believe life insurance can help you live well now - and feel very secure about tomorrow. The longer you own it, the more valuable it becomes. And as you build other assets over time, your life insurance program will provide a solid foundation and allow you to use and enjoy those other assets more effectively.

Permanent Insurance

Permanent life insurance comes in different forms to meet a variety of needs.

  • Whole Life Insurance usually has premiums that remain fixed for the life of the policy. Whole life insurance also builds a savings element since part of the premium is used to accumulate a guaranteed cash value. Dividends, which are not guaranteed, may also increase policy cash value.
  • Universal Life Insurance is a variation of permanent life insurance that offers flexible premiums and the choice of either a level or increasing death benefit. As in Whole Life, cash value builds within the policy. While there are guarantees built into the policy, the cash value is based on the performance of the company and on how much premium is paid.
  • Indexed Universal Life Insurance is a form of permanent life insurance that combines the premium and death benefit flexibility of universal life insurance with the investment flexibility of variable life insurance by pegging cash values to a popular index, such as the S&P 500. The policy also provides protection in market downturns by providing a guaranteed minimum floor rate.

Living Benefits

When you hear people talking about the "living benefits" of life insurance, they are often referring to one's ability to access the cash value. Frequently the "living benefits" of the death benefit go unnoticed. Let's take a look at some:

  • Spend down your assets - A common concern for many people during their retirement years is conserving their assets and passing them along to their spouse or children. Owning permanent life insurance, however, allows you to have more flexibility and freedom with your spending habits. You can increase your retirement income and reduce the fear of dying without leaving behind sufficient assets simply by having a death benefit that will replace the assets that you spent.
  • Give assets to charity - Charitable giving has many tangible and intangible benefits, from income tax savings to feelings of philanthropy. An often-overlooked benefit is the potential to increase your income through a charitable giving program. If you have assets, like stocks or real estate, that have appreciated substantially, you risk paying taxes on those capital gains if you need to sell them to begin drawing an income. A charitable remainder trust, along with permanent life insurance, can provide the opportunity to increase your income, avoid capital gains taxes, provide a significant benefit for the charity of your choice, and pass along substantial assets to your heirs.
  • Maximize your pension benefits - Those of us who will receive a monthly pension from our employers will have to make a very important, and often irrevocable, decision before retiring - which option will you choose for a monthly income amount. Those options determine how much your spouse would receive if you were to die. Often people choose to accept a lower monthly amount in order to continue providing a benefit to a surviving spouse. By owning a permanent life insurance policy, you may have the flexibility to choose a higher monthly retirement income because the insurance will provide needed benefits to your survivors.
Employer-Sponsored Insurance
The Advantages

Most employers, even the smallest ones, offer their employees some form of life insurance benefit. For some companies, the benefit is a flat amount ($50,000, for example); for others, the benefit is a factor of the employee's salary (like 2 times annual salary). In either instance, if your employer offers you a life insurance policy through the company, you'll most often find that this insurance is a type called Group Term Insurance (Group Term). Group Term gets its name from the fact that coverage needs to be offered to a "group" of employees (often a minimum of 10). It offers a number of advantages to the employee, but also has a number of disadvantages.

For many people, a big factor in purchasing life insurance is the cost of the annual premium. If you did a very quick comparison of Group Term and many other types of life insurance, especially individual whole life insurance, it might appear that the Group Term is much less expensive. For a young employee, the initial yearly cost of Group Term might be pennies on the dollar when compared to whole life insurance. This is because the Group Term offers pure insurance protection only, and no potential to build any cash value. We'll see in a moment why this feature might make Group Term, in the long run, much more expensive.

Another advantage of Group Term is that it is typically written on a non-medical basis. That is, the employee does not have to take a medical exam and provide "evidence of insurability" - coverage is typically guaranteed. In many instances one's employer will cover at least a portion of the cost of the insurance.

Finally, when you retire, your plan might offer you the opportunity to convert your Group Term to a whole life or universal life policy without any evidence of insurability.

The Disadvantages

The first disadvantage can be found in the name - "term" insurance. That is, it does not last forever. If you leave your job, for any reason, you will lose it. Sometimes you can convert the term insurance into whole life or universal life, but you begin paying premiums based upon your age at the time of conversion. Also, because this conversion privilege is often guaranteed, the rates on these policies tend to be higher than they might be if you had gone through the normal underwriting procedure.

A second disadvantage, which can lead to term insurance ultimately costing more than whole life insurance, is that the premium typically changes every few years, even if you work with the same employer until you retire. If you do not ultimately convert the policy to a whole life or universal life policy (and then pay very high premiums), you may have nothing left.

Do I still Need Life Insurance If...

I am Retired?

Many people think that the need and uses for life insurance are only applicable during one's working years. In fact, for many people, the only life insurance they ever have is that which is provided by their employer. Permanent life insurance, however, has a number of features that can provide benefits to you and your family both before and after your retirement. Some of these include:

  • Premiums that will never increase
  • Cash value that builds on a tax-deferred basis and can be used at any time for any purpose
  • The creation of an instant estate at a time when your loved ones need it most
  • Permanent death protection that will enable you to spend down additional assets and maximize your income during your retirement years
  • The ability to maximize your pension benefits

The presence of a guaranteed death benefit from permanent life insurance will give you the ability to increase your retirement income by enabling you to spend principal over your lifetime as well as income from retirement investment assets.

A guaranteed permanent life insurance benefit will provide assurance to a surviving spouse that they will be well provided for. Of course, this is dependent on whether the policy is in effect on the date of the death and the amount of loans against the policy. For example:

When the principal of retirement assets is being used to increase income during retirement, the guaranteed permanent death benefit of life insurance will provide the legacy to heirs that otherwise would come from income taxable retirement assets.

Inflation's eroding effect during retirement years can be offset by electing to have the annual dividend on permanent life insurance paid in cash to supplement other retirement income.

My Children Are Grown?

Providing funds to cover college cost for your children, even if you pass away prematurely, is a goal that many people share. After all, the benefits of a solid education far outweigh any cost for tuition. Many people use life insurance, either in the form of a death benefit, or by drawing upon the cash value, to ensure that this is accomplished.

Unfortunately, many people think that after accomplishing this goal they would be better off if they terminated all or a portion of their life insurance. What they fail to see is many of the other living benefits that a life insurance policy can provide. For instance, a permanent life insurance policy can help you increase the value of the assets that you pass on to your heirs. Through the use of various charitable gifting programs and permanent life insurance, both you and your children can realize increased wealth, and can avoid substantial income and estate tax burdens.

My Spouse Is Working?

A common approach to determining how much life insurance to purchase involves two basic steps. In the first, you would add together all your cash "needs." This would include things like paying off debt, providing for education funds for your children, and providing income for your surviving spouse and family members. The second step is to subtract from this number all of your resources - things like current assets and your spouse's income. The result would be the amount of life insurance that you "need." While this method has some merit, it has one substantial flaw - this method does not consider your " human life value."

The human life value approach to determining how much life insurance one ought to own involves a capitalization of a wage earner's income based upon factors such as age and earning potential. Essentially, your human life value is the present value of the portion of your potential earnings which (assuming you live long enough to realize those earnings) will be used to provide for others (spouse, children, etc.). This approach is of particular importance to those families that are more dependent upon the earnings of a spouse or parent than on earnings from investment assets.

Let's look at a simple example. Suppose you are 45 years old and currently earn $50,000 per year. If you intend to retire at 65, you would earn approximately $1 million over the next 20 years (assuming no inflation and no pay increases). You could say that your human life value is, therefore, approximately $1 million, and this is the amount of life insurance you should carry to protect those potential earnings.

Company Ratings

Several large U.S. insurance rating services assign letter grades to insurance companies based on the company's financial strength and claims paying ability. These major rating services include A.M. Best; Duff & Phelps; Moody's; Standard & Poor's; and Weiss. You can find their rating information on the Internet or get it from your prospective insurance company.

According to some experts, if you're buying a permanent life policy or an annuity, the company should be rated by at least three of the five rating services and have one of the top three ratings by at least two of those services. This may sound extreme, but keep in mind that life insurance is not primarily an investment — you're buying it for the death benefit — so you want to feel secure that the company will be in business and able to pay a claim when you or your heirs need it.

Premium Financing

While your financial strategy may require you to purchase a large amount of life insurance, you may have some reservations about paying your premium dollars using your existing assets or current cash flow. For example, you may believe you can earn more on your money than you would pay in loan interest fees. You may have illiquid assets, such as stocks, bonds, real estate or business assets, that you prefer not to access in order to fund your life insurance purchase. Or, perhaps you prefer to preserve your cash for other purposes.

Whatever your individual circumstances may be, you do have an alternative: premium financing. It’s an innovative financial strategy designed to help individuals buy large amounts of life insurance for personal or business purposes, while leaving cash or other assets in place — or available to be used in other ways.

So whether you are using life insurance for estate funding, philanthropic, or business planning purposes, you can now leverage the power of borrowed funds from a commercial lender to access the premium dollars you need – while you continue to acquire, grow and preserve your other assets for your heirs or valued employees.

Who benefits from premium financing?
  • Affluent individuals who want to purchase life insurance to leverage the value and tax advantages for:
    • Personal estate planning
  • Business owners who don’t want to use existing assets, but do want to fund:
    • Executive benefits
    • A buy-sell agreement
    • Key person insurance

Leveraging the power of credit to pay your life insurance premiums may enable you to save on taxes — and keep your investment options open for other opportunities. And paying life insurance premiums with borrowed money minimizes your out-of-pocket outlay.

Other Premium financing benefits, tax advantages, and more.

Premium financing offers several specific advantages:

  • Minimizes or helps avoid gift taxes.
  • Helps you retain assets and avoid the need to sell securities in a “down” market to raise cash for life insurance premium dollars.
  • Provides alternative options — if your annual gift tax exclusion or unified credit is exhausted, premium financing may be a good option. Smart investors who would be candidates for premium financing are high-net-worth individuals needing larger amounts of life insurance, which is generally held in a life insurance trust. Because the required premiums usually exceed annual gift tax exclusions, premium financing, coupled with an exit strategy for the loan, allows those larger sums to be available in the trust while minimizing and possibly eliminating gift taxes.

Disability Insurance:

Many of us don’t want to think about struggling financially because we’re unable to work. Yet it’s a possibility, especially since disability is a common problem, and many people don’t have adequate savings to support them for an extended period of time.

If you become too sick or injured to work, disability income insurance can help replace your income and maintain your standard of living. Berkshire Life Insurance Company of America and Genworth are the leading providers of individual disability income insurance.

A Qualified Sick Pay Plan Benefits You and Your Employees

If the business owner or a key employee becomes disabled, the firm cannot continue to pay wages and deduct these payments as a business expense unless a Qualified Sick Pay Plan is in place prior to the disability. Although the plan can be self-funded, using disability income insurance to cover this obligation offers several advantages to the business owner: the insurance company determines if an employee qualifies for a claim, pays the disabled employee, and provides tax reporting. Premiums paid for disability insurance are a tax deductible business expense, and coverage is available at a discounted rate.

Benefits for the employer:
  • Owners and employees can be covered by industry-leading individual income protection
  • You choose which employees will be covered and what benefits will be offered
  • Attract and retain high quality staff — and recognize key employees
  • Premiums paid by the business may be tax deductible
  • The plan is simple to set up
  • The insurance company assumes the financial risk, responsibility for claims determination, provides policy administration and tax reporting
  • Permanent 10% discount on employer-paid premiums when there are 3 or more participants
Benefit for the employee:
  • Provides a monthly benefit should they become too sick or injured to work
Simple steps to implement a program:
  • Establish who will be covered under the qualified sick pay plan
  • Adopt the plan and document it — sample documents are available
  • Obtain benefit proposal from the insurance representative
  • Communicate plan details to employees

Long Term Care Insurance:

Long term care needs can affect you in a variety of ways. If your parent or spouse someday needs long term care, your family may face the possibility of spending a great deal of time or money providing it. And if you someday require care, you want to make sure money is available to allow you and your family to enjoy the best quality of life possible.


The task of assembling an investment portfolio may present you with many questions. One of the most important of these questions is, "What assets would I like to include in my portfolio?" Although it may sound like a simple question, the options are numerous. However, the most common types of assets available are stocks, bonds, cash, and a combination of these offered as mutual funds. No one item is "better" than another; however, they may all vary in their risk vs. reward potential.


Owning a stock means buying a "share" or portion of a company. The more shares of stock you own in a company, the greater the gain if the company succeeds. Conversely, the more shares of stock you own in a company, the greater the potential you have to be adversely affected in the event of poor financial performance. Stocks offer the investor no guarantees of any earnings, but the potential for gain if the stock performs well. Prior to investing in any stock, research is imperative. Obtain a copy of the company's financial statements - these documents are required to be filed regularly by the Securities and Exchange Commission (SEC) and are available from the company offering the stock or, in many cases, may be found on the Internet - and carefully review it prior to any investment.


Bonds are promissory notes or "IOUs" issued by a corporation or government to its lenders. A bond is evidence of a debt on which the issuing company usually promises to pay the bondholder a specified amount of interest at intervals over a specified length of time, as well as repay the original loan on the expiration date. A bond represents debt; therefore, its holder is a creditor of the corporation. Bonds are considered more conservative investments than stocks. This is due, in part, to the fact that bonds earn interest that is generally fixed and, thus, limited


Cash, a liquid asset, is also typically found in a diversified portfolio. Typical cash vehicles include certificates of deposit (CDs), money market accounts, short-term savings bonds, and bank savings accounts. All of these options offer substantial liquidity and safety of principal but, generally, earn a much lower interest rate than bonds, or the dividends or gains you could earn by investing in stocks.

Keep in mind that significant differences exist in risk among investment asset classes. Bank CDs are FDIC insured and offer a fixed rate of return, whereas securities are not FDIC insured, and both their principal and yield may fluctuate with changes in market conditions.

Mutual Funds

Mutual funds allow the investor to purchase a share of not just one company's stock, but a larger portfolio of professionally managed investments, that can include a mixture of stocks, bonds, and cash. Mutual funds range in value from several million to several billion dollars, and have different purposes and growth and/or income expectations. They range from the very conservative money market funds to aggressive growth funds, and fall into several general categories, based on the major objectives of the fund: income; long-term growth; growth and income; or a balanced investment strategy.

Mutual funds, by their very nature, provide the investor with a diversified portfolio and professional fund management, as well as increased buying power. They provide the investor with a streamlined approach to investing. For example, instead of making separate purchases of stocks, bonds, and certificates of deposit, you could invest your money in a mutual fund - one that contains a balance of investments that suits your level of risk tolerance. As prior performance of a mutual fund is not a guarantee of its future performance, it is important that you thoroughly research any potential investments.


An annuity is a long-term investment contract that provides you with an option to annuitize at retirement. An annuitized contract can potentially provide you with a regular stream of income, for as long as you live or for a designated period of time after your retirement. Annuities also typically include a death benefit.

Assets in an annuity grow tax deferred until they are withdrawn, and there are no contribution limits under federal tax law. Withdrawals of taxable amounts will be subject to ordinary income tax and possible mandatory federal income tax withholding. If taken prior to age 59 1/2, a 10% IRS penalty may also apply.

Variable annuities generally carry an annual mortality and expense risk charge and an annual administration charge. Withdraws may be subject to a contingent deferred sales charge. In addition, annuities usually offer optional enhanced death and living benefit riders, which may have fees associated with them.

Annuities are long term investment vehicles designed for retirement purposes. Withdrawals or surrenders may be subject to surrender charges. Amounts withdrawn may be subject to ordinary income tax, and if taken prior to age 59 1/2, a 10% IRS penalty may also apply. Withdrawals have the effect of reducing the death benefit, cash surrender value and any living benefits.

Type of Annuities

Annuities can be categorized into a few different types:

  • A fixed annuity is a contract where principal, interest, and the amount of benefits paid are fully guaranteed by the insurance company.
  • A variable annuity does not offer guaranteed returns. Instead, variable annuities offer the potential to realize higher rates of return by giving you the opportunity to choose the variable investment options in which your money will be invested. Please keep in mind that your rate of return is not guaranteed and your principal is subject to fluctuations. Many variable annuities also offer a fixed interest rate account in addition to the variable investment options.
  • An immediate annuity is purchased with a single premium payment and you set the starting date for the payout to begin sometime within the next 12 months-generally sooner rather than later.
  • A deferred annuity is an annuity for which annuity payments to the owner begin only after a period of time, known as the accumulation period, has passed. During the accumulation phase, you can attempt to build your deferred annuity with a lump sum, a series of payments over time, or both. The ability to combine one-time and periodic contributions gives you added flexibility as you seek to build a larger retirement resource.
  • An indexed annuity combines the guaranteed principal protection of a fixed annuity with the potential to realize higher rates of return by pegging to a popular index, such as the S&P 500. The policy also provides protection in market downturns by providing a guaranteed minimum floor rate.

Annuities are long term investment vehicles designed for retirement purposes. Withdrawals or surrenders may be subject to surrender charges. Amounts withdrawn may be subject to ordinary income tax, and if taken prior to age 59 1/2, a 10% IRS penalty may also apply. Withdrawals have the effect of reducing the death benefit; cash surrender value and any living benefits.


An annuity's most unique feature is its annuitization option. This feature cannot be found in any other investment or accumulation vehicle. When you annuitize, usually at retirement, you have the option to receive a stream of income that you cannot outlive. If you designate yourself as the annuitant (the measuring life for annuity payments) and you choose to have the annuity benefits paid over your lifetime, the monthly or annual payment amount is guaranteed by the claims-paying ability of the issuing company regardless of how long you live, even if the total payments exceed the accumulated account value of the annuity.

Annuities are long term investment vehicles designed for retirement purposes. Withdrawals or surrenders may be subject to surrender charges. Amounts withdrawn may be subject to ordinary income tax, and if taken prior to age 59 1/2, a 10% IRS penalty may also apply. Withdrawals have the effect of reducing the death benefit, cash surrender value and any living benefits.

Estate Planning

How well prepared are you to protect your estate? We can suggest innovative planning techniques and other unique ways to help you protect your assets and direct them where you want them to go. To assist you in the development of an estate planning strategy, we offer a range of personal trust and investment services.

Estate Planning Fundamentals

Many individuals put off planning their estate. For some, this is due to the misconception that estate planning is only necessary for the wealthy or only involves tax planning, which can be done "later." For others, it's because they simply have a difficult time contemplating their own death—a perfectly natural reaction. Yet, it is important to recognize that regardless of these issues, solidifying the future of your family is probably high on your list of priorities. That's why a well-structured estate plan is invaluable. Through it, you can control the distribution of your assets and possessions during your lifetime and after your death, as well as name guardians for your children or plan care for other dependents.

Getting Started

Your first step in developing an estate plan should be to assemble a competent, professional estate planning team. For some, this initial step is a difficult one, because it requires you to share your personal thoughts, fears, wishes, and financial affairs with others. Therefore, it is often comforting to incorporate at least one trusted advisor, regardless of his or her area of expertise, in the estate planning process. Certainly, your attorney will play an instrumental role in preparing any necessary legal documents. However, your financial professional, bank trust officer, insurance agent, or accountant may also need to become involved. Generally, the size and complexity of your estate, as well as the existence of an established relationship with an advisor, will dictate the overall involvement and/or need for additional professional expertise or emotional support.

Initially, your estate planning team will focus on your current financial position. This is a very important part of the estate planning process, because you need to know where you stand today in order to accurately plan for the future. For this reason, you will need to gather any and all materials involving current or future income, property ownership, insurance, and legal arrangements already in place. This may require you to divulge a lot of private information, but it is a necessary part of the estate planning process. Here is some of the information you'll need to provide:

  • Current income from employment and all investments
  • Investment documents, certificates, statements, passbooks, etc.
  • All retirement benefits: Social Security (including survivors' benefits), Individual Retirement Accounts (IRAs), pension and profit sharing plans
  • Any expected deferred compensation
  • Deeds to primary and vacation residences
  • Life insurance policies of which you are the owner, the insured, or the beneficiary
  • A list of all personal property
  • Current and expected debts and obligations, including mortgage and loan balances, real estate liens, taxes payable, consumer debts, and estimates of funeral costs and estate settlement expenses
  • Your will, if you have one
  • Trust agreements, if any

A complete analysis can begin once you've assembled this information. This will allow you to take a closer look at your family's needs. Some important questions that to which you will find answers include:

  • How will your family's overall cost of living requirements change in the years ahead?
  • Who will take care of any minor children if something happens to you?
  • Who will make medical and financial decisions on your behalf if you become incapacitated due to illness or injury?
  • What are the estimated educational expenses when your children reach college age?
  • Is there a family member who needs special care or medical attention?
  • How will estate taxes affect your assets as they are currently held?
Keeping an Open Mind

The careful planning of an estate requires you to share a lot of personal and financial information with one or more professional advisors. This fact alone often serves as an initial stumbling block to the planning process. However, without an accurate financial and personal portrait, your estate plan may not accomplish your goals and objectives. In addition, while most of your initial time will be spent creating your first estate plan, your circumstances—both personal and financial—are bound to change over time. Therefore, your estate plan will need to evolve so it will continue to address your needs and wishes.

By keeping an open mind and placing your trust in a competent advisory team, you can help ensure that your wishes for asset control and distribution will fall nothing short of your expectations.

Creating Liquidity Using an Irrevocable Life Insurance Trust

An irrevocable life insurance trust (“ILIT”), is an estate planning solution that anticipates the need for liquidity upon the death of a high net worth individual, to pay estate taxes and administration expenses, and to provide cash to surviving family members to continue their financial needs. An ILIT can also be used to replace the wealth that was lost to estate taxes and administration expenses. What’s more, life insurance proceeds paid to the trust are free from income and estate taxes, and the trust protects the proceeds from the creditors of the beneficiaries of that trust (e.g., your children), and from their potential ex-spouses.

Retirement Planning

Today you can expect to live a longer, healthier life than ever before. But how do you make sure you’re also living well? For Baby Boomers headed for retirement, the answer lies in a well-crafted retirement strategy that can encompass everything from a full portfolio of products to comprehensive planning and support in executing plans.

Choosing Your Retirement Destination

What will you look for as you approach your "golden" years? Do you want an affordable condo on the golf course, with room for visiting grandchildren? Would you like to remain in a community surrounded by old friends and family, or would you prefer living in close proximity to new friends? Is access to excellent medical facilities a priority?

In addition to considering these lifestyle questions, as you decide where your retirement haven will be, you should research the effect of state tax structures on your projected retirement income. Here is a look at the following key tax areas:

  • Earned and unearned income taxes. If you plan on continuing to work, some states treat seniors like everyone else on their income tax rolls, some specifically give seniors tax breaks on earned income, and others do not tax earned income for any of their residents. Tax rates on unearned income may also vary from state to state. Be aware that several states tax former residents on Individual Retirement Account (IRA) withdrawals. Thus, if you move, you may have to file income tax returns in two states. And, watch out for unexpected local income taxes.
  • Pension income taxes. In many cases, the key to financial survival for seniors is income from military, government, and private pension plans. Some states exempt all pension income from taxation, while others exempt certain types and/or amounts of pension income.
  • Social Security benefit taxes. Some states do not tax Social Security at all, while others follow federal tax formulas for determining their tax on such benefits. Still others have developed their own formulas to determine the income tax on Social Security benefits.
  • Property taxes. This is another area where some states offer advantages to seniors. In addition, remember to check on personal property tax laws, especially on cars and boats.
  • Sales taxes. Many states—and sometimes localities within each state—tax clothing, gas, household goods, and sometimes even food and prescription drugs. When you look at what you have budgeted out of your fixed income for these items, remember to add sales taxes if they will apply when you move to your retirement haven.
  • Estate taxes. While not directly affecting your cost of living as a senior, do not overlook estate taxes when determining the feasibility of settling in one state over another. In some states, your spouse may be taxed on a portion of his or her inheritance that in another state would pass to him or her free of state estate tax. Changes in state estate tax codes should be watched carefully as states study ways to make their financial environments "friendlier" to seniors.

No single tax consideration should be used to determine the most favorable tax environment for your retirement years. You need to analyze your overall financial situation and then look at your retirement options. Your main goal should be to spend your senior years where you will be relatively free from financial stress—to live the happy, healthy life you have earned.

Business Planning

Are your personal and professional finances closely linked? How do you maximize opportunity and minimize risk? Our business continuation strategies are designed to help business owners with a broad array of plans, including succession planning and exit strategies.

Implementing the right business strategies means you are more likely to be free of worries and able to concentrate on your business goals and dreams.

Whether you are looking for insurance, retirement products and services or investments, part of what you'll need to consider will be uplifting — like rewarding your employees and top executives with benefits and bonuses. And, part of what you'll need to manage is the unexpected — like maintaining business continuity during a disability of yourself or one of your employees, or upon the death of a business partner.

Business Continuity

Illness or injury, whether your own, a business partner's or an employee's can derail your business. The solution is to prepare now, especially by considering that business expenses will continue during and after an unexpected disability.

You shoulder a lot Business Continuity a personal disability income insurance and a buy-out agreement funded by disability income insurance help solve part of the problem when disability strikes a business owner Business Continuity namely, it helps to replace the business owner's income.

Additionally, business expenses — payroll, rent and utilities — will continue while the disabled owner is recovering. In preparation and management for these situations, business owners need additional protection to help meet routine business expenses.

Business Overhead Expenses Protection provides a solution — in the form of cash — to the business upon the disability of the insured owner to cover routine business expenses. This policy reimburses the owner for covered business overhead expenses up to a specified limit on a monthly basis during disability. Additionally, the policy can help assure the company employees that — in the event of the owner's disability — the business will continue to operate and their jobs will be secure.

Incentives for Key Employees

Often time employers look for those little extra things they can do for key employees. Nearly every business has key employees who are critical to the overall success, profitability and management of the business. There are many ways an employer may use life insurance as a means to provide an extra incentive for key employees … key person insurance, executive bonus and deferred compensation.


Buy-Sell agreements and their funding are critical to a smooth transition of business ownership from one party to another. As a business owner, a buy-sell agreement provides a ready market for what is typically an asset without a public market. Without a buy-sell agreement, a deceased business owner's estate may be stuck with an illiquid business interest that may not be easily sold. A buy-sell agreement, properly funded with life insurance, is an ideal alternative to insure the business owner's illiquid business interest is converted to cash for the family.

Executive Bonus Plans: Simple and Effective

As the owner of a closely-held company you understand the critical importance that key employees play in the success of your business. In addition to paying an attractive salary, you must offer a competitive benefits package to recruit talented people to your organization and provide additional perks to retain and reward them.

For example:

A qualified retirement program such as a 401(k) plan is a fairly common employee benefit but often it is insufficient by itself to provide the level of benefits that executives expect from their employer. Qualified retirement plans are subject to significant rules and regulations that limit the annual contribution amounts, may restrict highly compensated employees from contributing, and prohibit employers from picking and choosing which employees may participate. Indeed, as a business owner, you may sometimes find your company’s benefits package lacking for your own personal needs.

So, what other option do you have for providing extra benefits to executives and key employees to help recruit, retain and reward them? The answer is: a nonqualified executive benefit plan.

Unlike qualified retirement plans, nonqualified executive benefit plans allow you to select the employees that you wish to cover and exclude others. These plans provide for supplemental sources of retirement income, as well as risk protection from death. The contributions that you may make to nonqualified plans are not set by the government but by business objectives. Also, the administrative requirements are nominal compared to qualified plans.

Among nonqualified executive benefit plans, the most popular is perhaps the Executive Bonus Plan. Its popularity is due to its simplicity, relative lack of restrictions, and tax benefits to the employer.

As a Business Owner, Why Would You Choose to Implement an Executive Bonus Plan?

An Executive Bonus Plan using permanent life insurance is the simplest form of an executive benefits program. It is easy for both employers and employees to understand. Why? An Executive Bonus Plan is simply a personally owned permanent life insurance policy paid for by the business resulting in a tax deduction for the business. No IRS approval is necessary. The plan does not fall within the requirements of ERISA-like qualified retirement plans, and there is virtually no administration or costly accounting or legal fees to create or maintain the plan.

An Executive Bonus Plan offers your business a great opportunity to provide select key executives (including, in some cases, yourself as a working owner) and employees, valuable life insurance coverage with tax deferred cash value accumulation.

Executive bonus plans can help employers reward select employees, supplement existing benefits plans, stimulate better employee performance, provide a cost-effective benefit replacement for group term life insurance and minimize reporting requirements.

Under an Executive Bonus Plan (also known as a Section 162 Plan), the employer provides a bonus to select employees in the form of cash or in the form of premiums on life insurance or disability policies on the employees' lives. The executive receives the bonus as taxable income; and the employer is provided with a business tax deduction assuming the bonus qualifies as reasonable compensation to the executive.

Executive Bonus is different from key person insurance because it is employer-financed personal life or disability insurance intended to benefit the selected employees, where as key person insurance is intended to protect the business from losses resulting from the employee's death.

By providing a bonus to select employees, an employer is able to provide additional compensation to certain employees and deduct the premiums for a policy on the employee's life or disability insurance (provided it qualifies as reasonable compensation).

With life insurance, the death proceeds are usually received income tax-free by the employee's beneficiary and with disability income insurance benefits are generally received income tax free by the employee.

Benefits to the Employer:
  • The bonus plan is simple to create
  • The bonus amounts are tax deductible for the business (subject to reasonable compensation limits)
  • The bonus helps the employer attract, retain and reward key employees
  • The employer has flexibility in bonus amounts
  • There are no government limits on funding; the plan requires no IRS approval and entails minimal ERISA requirements and negligible administration
Benefits to the Executive:
  • The executive owns the insurance policy
  • The executive incurs little out-of-pocket cost
  • The executive gains tax-deferred growth of the cash value, which can be used to pay for a child's education, retirement or other purposes
  • The death benefit will be received by the executive's beneficiaries income tax-free and possibly estate tax-free
Key Person Plan

As a business owner you cannot do it all. You rely on a few key employees who help make day-to-day operational decisions, who play a key role in obtaining credit with a financial institution or who oversee all sales activities. Losing one of these key employees could set you back.

Key person life insurance provides life insurance protection on the life of a key employee and is purchased to help reimburse the business owner from economic loss caused by the death of the employee.

The insurance may be purchased and used for key person insurance to help bridge the gap of the lost revenue or increased expenses due to a loss of a key person. This would allow the business to continue to operate and provide the funds necessary to recruit a new employee to take over the key person's functions.

By using life insurance, the death benefit would be available to pay for an employee search, pay that person's salary and create a cash cushion for the business during this trying time. The life insurance can also guarantee a specific death benefit precisely when the money is most needed, provide tax deferred accumulation of cash value and minimize the impact on the business's financial statements.

Satisfying Debt Obligations

Many business owners finance the expansion and growth of their business through bank loans. However, many financial institutions may require life insurance on the owner of the business to secure or collateralize this debt. In case of the death of the business owner, the lending institution would recover its loan from the death benefit. A life insurance policy may provide the death benefit necessary to fulfill this obligation. The policy may be owned by the business or by the business owner individually with a collateral assignment of the policy to the financial institution. To the extent the proceeds exceed the debt, the owner of the policy can name a beneficiary for the remaining death benefit.

Split Dollar Arrangements

Split dollar arrangements let a company provide significant life insurance and retirement benefits to key employees with funds that the company can eventually recover.

Businesses often use non-qualified retirement plans as special rewards for top executives. Split dollar arrangements are one example: they let business owners fund the purchase of life insurance on an executive using corporate dollars that can later be recovered. Split dollar arrangements are an excellent way to provide benefits to non-shareholder executives or even the business owner.

With a split dollar arrangement, the employer advances the executive the premium on a life insurance policy and the two share the cash value and death benefit. Generally the employer has rights to the cash value and death benefit, equal to the greater of its cash advances or cash value of the policy, and the remaining balance goes to the executive.

The life insurance policy premium is not tax deductible for the employer and is not included in the executive's gross income. The executive gets a financial benefit equal to the term value of the death benefit, so he/she must pay income tax on that economic benefit. Under certain circumstances, excess cash value may be included in the executive's income.

It is also possible to establish a split dollar arrangement using below market rate loan rules. This method is generally used when it is important for the executive to control the cash values of the life insurance policy.

Education Planning

Planning for the Rising Cost of Education

College tuition costs keep increasing on a yearly basis with no apparent end in sight. Including tuition, fees, room and board, the average cost at private colleges nearing $40,000 per year.). With this in mind, the projected cost of educating today's newborn is staggering.

Consequently, whether you are considering a public or private college for your child, it is essential that your planning begin as early as possible. Many parents procrastinate because they feel the task is overwhelming, or they think that saving the required amount of money will force them to severely compromise their current lifestyle. While both of these concerns are legitimate, they need not stand in the way of establishing - and maintaining - an effective college funding plan.

The starting point for developing a plan is to understand the available funding options. Let's take a look at some of them:

  • Scholarships. While certainly desirable, there is no way to predict whether your child will qualify for a scholarship. Counting on getting a scholarship is similar to counting on winning a lottery—there are far more nonqualifiers than winners.
  • Financial Aid. Usually in the form of loans, aid rarely covers total college costs. Even if you qualify on a "needs" basis, there is no assurance that the college of your choice will be able to help all those in need.
  • Personal Income. Procrastinators generally expect to fund college expenses from current income. Would you be able to pay the current cost for one year out of your present personal income?
  • Personal Loans. While generally available, they could prove costly over the long run when total interest charges are considered.
  • Savings. This is the one funding option over which you have complete control. While it may not be easy for a young family to save, even small amounts can grow substantially through the effects of time and compounding. The longer you wait, the more difficult it may be to reach your funding goal.

Because of the uncertainty surrounding all funding options except savings, it is critical to make personal savings the cornerstone of your college funding program. However, even a well-conceived savings plan is vulnerable. Should you die prematurely, your savings plan could come to an abrupt end.

To protect against this unexpected event, life insurance is the only vehicle that can help assure the completion of a funding plan. In addition to the protection aspect of insurance, the tax-deferred buildup of cash values can be part of your college savings plan. Generally, distributions up to the contract's cost basis are tax free. Moreover, loans in excess of the cost basis are also tax free as long as the policy remains in force.

Also of particular importance, life insurance cash values are excluded in the needs analysis formula for financial aid used by government agencies and most schools. This means you can build an asset without being penalized if applying for financial aid.

All of the potential sources should be considered when developing a college funding program. However, a regular savings plan, along with life insurance, may be the best way to assure your child will have the means to attend college should something happen to you. Let time be your ally by starting your program now!

Consider the Issues

During the 2015-2016 school year, tuition at public four-year and two-year colleges rose to its highest rate in three decades (Source: The College Board, Trends in College Pricing).

Putting together a strategy to fund a college education is often a family affair - a combination of savings from parents, grandparents, and children, loans taken by both parents and students, as well as grants and scholarships.

Your family's financial need is the primary factor in determining whether or not you qualify for financial aid. However, some states base their determination on academic performance as well.

If you're going back to school, you can deduct education expenses if the schooling enables you to keep your job and salary, or maintains or improves the skills you need in your current job.

Brice Financial can help you plan for the rising cost of education with our mutual funds, 529 plans and other products.

Charitable Planned Giving

So, why do people give? There are many reasons.

Some people have a real sense of wanting and needing to make an impact on society through their charitable giving. They want to make a difference in the world and are willing to share some of their wealth in order to accomplish that.

Others are very concerned about their local community. They may have been raised in the community or the community may have been very good to them, such as supporting their business and making it a success. And, therefore, they want to direct their efforts in making the local community even stronger or better.

Many families are known for their philanthropic activities. They have created a legacy for their family names and in order to perpetuate that legacy, they need to pass on the family values to the next generations so that the younger generations may continue the family’s good work and maintain the family legacy in society.

A sense of guilt is a powerful motivator. Some people feel guilty about their good fortune when others around them are not as fortunate, so they are motivated to give back. Some people feel that with wealth comes a social obligation to give back.

Charitable giving is sometimes simply good business. Many business owners make charitable contributions out of their businesses because it enhances the reputation of the business in the community. The reputation of a business is a very valuable commodity and charitable giving enhances that reputation and builds a substantial amount of goodwill. The end result is that consumers may be more apt to frequent that business because of its reputation in the community.

Special Needs Planning

You have children dear to you and close to your heart and you will always care and worry about them. What will their future be like? Will they be able to meet their financial needs? Will they be able to afford and have access to any and all health care that they might need?

Most children, when they become adults, are expected to assume responsibility for themselves. But, what about those who can’t provide for themselves because of a physical, mental or emotional illness or disability, and have, and will continue to have, a lifelong dependency on you for their care and support?

That child could be a victim of an accident who now depends continuously on you for meals, transportation and personal care; a child born with a severe medical condition who, without you, could not get through the day; or a child with some other debilitating condition or illness. They have “special needs” beyond the usual love and care that you might typically provide.

The enormity of the same questions asked above is amplified when you follow each question with the words — “if I should die or become disabled?” How do you address meeting those needs? How do you plan for a special needs child? As you think about responses to these questions, a million additional questions probably race through your mind, along with a mental checklist of things to be concerned about.

The following are a few of the many concerns when you have a special needs child:

  • Physical and Emotional Care of the Child: Guardianship Issues
    • Who should assume my role as the primary caregiver after my death or disability?
    • Could it be my other children or another family member?
    • Would the designated guardian of my child also control the assets and property left to, or for the benefit of, that child?
  • Financial Considerations: Government Programs
    • Are government programs being used to assist in the care of my child?
    • Will government programs be used to assist in the care of my child after my death?
    • If government programs are used, will my child continue to meet the “means” tests (i.e., eligibility based upon income and net worth) used to qualify for these programs?
    • Is the level of care provided under government programs sufficient for the financial and physical well-being of my child?
  • Other Family Issues
    • Are there other children in the family? Are they minors?
    • What level of support will they need?
    • Are there any special concerns to address with the other children?
    • How do I avoid the possible perception of preferential treatment towards a child?
  • Estate Tax Issues
    • What is the expected size of my gross estate?
    • What impact, if any, will potential estate taxes have on my estate and what I leave to my children?
    • Is there sufficient liquidity to meet this estate tax liability and still meet the needs of my family?
  • Planning Considerations
    • How important will it be to qualify for public assistance for the benefit of my child?
    • Will what is known as a “special needs trust” be appropriate for the current situation?
    • Have the needs of the rest of the family been accounted for in the planning process?
    • Am I treating everyone fairly?

At Brice Financial Services, we understand your concerns and your questions and can help you to create a plan that helps solve these issues and meets the financial needs of the child with special needs, allowing him or her to maintain a high quality of life in your absence. The plan will also ensure that the needs of the rest of your family are met.