Multiple Employer Trusts: Using Before-Tax Dollars for Life Ins. Broker World (08/01/02) p.48; Budihas, John S.
Regardless of the future of federal estate taxes, estate liquidity planning will continue to be a necessity in reaching personal and business planning objectives, according to this article. Estate liquidity planning becomes valuable in replacing assets lost to potential creditor and litigation claims. In addition, it helps prevent the shrinkage of income and guarantees the execution of a business continuation agreement. This article discusses the role of life insurance and multiple employer trusts (METs) in estate planning. METs often allow business owners to use before-tax dollars to purchase life insurance, and the use of a MET may also potentially reduce the company's accumulated earnings tax penalty.