Page 43 - MetalForming November 2009

DieProtection for
Lean
Error-proofing concepts for toolmakers and die designers
Manufacturing By Drew Stevens
This new book from the Precision Metalforming Association is written by long-time die-sensor expert Drew Stevens, who shows readers step by step how to develop modern sensing technologies for the pressroom and apply them to a lean- manufacturing environment. “Slow stamping-press speeds and frequent die crashes are not acceptable,” writes Stevens, “and the manufacturers that choose to shift their thinking to new technologies will prevail in the world metalforming market.”
To learn how to protect investments by applying sensors in your metalforming operation and support your lean- manufacturing directives, order a copy of Stevens’ book today.
Call Marlene at 216-901-8800 x127 Online at www.pma.org and visit our Online Store
your family, owns the captive. Say your company pays captive that $400,000 in premiums, which your company deducts. Here’s the beauty of the tax law: Captive not only receives the $400,000 tax-free but invests it for earnings. Premiums plus earnings (called “unused reserves”) are available to pay your claims. A con- cept called reinsurance covers your company should your unused reserve not be large enough to pay claims.
Wait, there’s more. A captive can insure risks that your regular P&C car- rier will not insure, for example, loss of a key customer, supplier or employee, product warranties and an endless stream of other similar risks. Same too- good-to-be-true-tax deal: You deduct the premiums, captive receives them tax-free.
Is a captive for you? The answer is “Yes” if your annual before-tax profit is in the $1 million range.
Premium Financing
for Life Insurance is Back
Life insurance is required for many purposes: pay estate taxes, provide for your family, pay debts and, if you know how to do it, life insurance is the best tax-advantaged investment I know of. It’s an investment that never loses (death is guaranteed) and your profit (policy proceeds less premiums paid) is tax- free (no income tax, no estate tax).
One problem with life insurance: The blasted stuff costs money for pre- miums. Is there some way to have your cake (a large amount of life-insurance coverage) and eat it too (no or minimal out-of-pocket costs for premiums)? Because of the current credit crunch, premium financing for life insurance has been on a long vacation. But it’s back. Lenders, if you know where to find them, are back in the premium financing game.
How does premium financing work? Instead of you or your trust paying pre- miums, the lender pays your premiums
(creating a loan). Loan interest can be paid or capitalized (added to the loan). Of course, when you go to heaven, the loan is paid back out of the insurance proceeds, while your heirs get the bal- ance of the insurance coverage tax-free (typically $5 million or more).
Results: Your family is enriched (tax- free) at your death, while your premium cost during life is zero or miniscule.
If you need a large amount of life insurance (or just want an investment that creates tax-free wealth), premium financing is at the head of the class for “How to make it.”
And What About the Future?
The nature of my work (primarily lifetime tax planning that dovetails with your estate plan and related areas) requires me to always keep an eye on what the future economy might look like down the road.
I’m not smart enough to be both a tax guy and an economist, but I read a lot. My favorite and most accurate eco- nomic forecaster is Adrian Van Eck (I’ve been reading his newsletter, “Hotline on Money and the Economy” for about 25 years). He never has missed calling a trend—good or bad—in all of those years.
Here’s a recent quote that says it all: ”Instead of a new Great Depression, we may now be looking at boom years ahead such as we have not enjoyed for a long time” (May 1, 2009 newsletter).
Don’t have room to give you all the reasons, but I’m bullish on the economy turning around. Are you? If so, plan for success. Aggressively seek new busi- ness. Tighten your business belt as nec- essary, but don’t downsize.
Most of all, get your lifetime tax plan and your estate plan done. Enjoy strate- gies that make you wealthy (or wealthier).
Want to learn more about how to make it and keep it? Browse my website, www.taxsecretsofthewealthy.com. Have a question, call Irv at 847/674-5295. MF
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