Using Life Insurance to Enhance Wealth Transfer

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Agenda

• Consider MetLife for your next Leveraged Credit Shelter Trust client

• Case studies and action plan

• What is a Leveraged Credit Shelter Trust and how does it work?

• Identify potential clients and their concerns

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Identify Potential Clients & Concerns

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• Widow or Widower

• Existing Credit Shelter Trust

• Age 50-85

• Doesn’t Need Trust Income

• OK with Resigning as Trustee

• Focused on Wealth Transfer

Do you Know this Client

• Insurable

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I don’t need the income

The ConcernI don’t need the income from the Credit Shelter Trust, so how do I use those assets to increase the amount transferred to the trust’s remainder beneficiaries?

increase theamount transferred

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The IssueThe Credit Shelter Trust (CST) is designed to transfer assets up to the deceased's lifetime exemption amount to non-spouse beneficiaries while still providing the surviving spouse with access to income from those assets, if needed.

transfer assets

access to income

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The Leveraged Credit Shelter Trust

Strategy

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What is a Leveraged Credit Shelter Trust?

A simple way for widows or widowers to utilize life insurance in their Credit Shelter Trusts to enhance the amount of wealth left to the beneficiaries.

life insurance

enhance wealth

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Potential solutions for decreasing trust income

• Municipal bonds

• Growth stocks

• Annuities

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• Life insurance

– Income tax-free death benefit for trust beneficiaries

– Tax-deferred growth of policy cash value

– Potential for guarantees1

1All product guarantees are based on the claims-paying ability and financial strength of the issuing insurance company

Potential solutions for decreasing trust income

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Potential solutions For choosing the right funding option

Investment alternatives for trust assets

Cost of death benefit protection

Optional death benefit guarantees

Immediately leveraged wealth transfer

Step-up in basis (at death)

Tax-deferred accumulation

Wealth transfer tax-free2

Life InsuranceTraditional

Investments

YES YES

NO YES

NO YES3

NO YES

NO YES4

NO YES2 Subject to strict adherence to gift tax laws regarding annual exclusion gifts. Clients should seek advice from legal and tax advisors before any transfers are made to an irrevocable trust.3 While technically not a stepped up basis at death, life insurance death benefits are generally paid income tax-free under IRC Section 101(a).4 Only specific life insurance contracts offer guaranteed death benefits. Guarantees are based on the financial strength and claims paying ability of the issuing insurance company.

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Implementing the Strategy

Provide Client Personalized Illustration and Product Prospectus,

if Applicable5

1 Discuss Wealth Transfer Goals with Client

2 Inventory Current assets in both trusts

3 Evaluate Credit Shelter Trust Funding Options and Life Insurance Needs

4 Determine Premium Amount

6 Initiate Underwriting

Discuss wealth transfer goals with client

Client confers w/tax and legal counsel to ensure this technique is appropriate for the particular CST

Evaluate current trust assets, credit shelter trust funding options, life insurance needs and insurability

Determine premium amount

Provide personalized client illustration and product prospectus,

if applicable

Initiate underwriting

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Case Studies & Action Plan

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Case StudyAge: 68

Estate:$5m

CST:$1m funded with after-tax investments growing at 5%

3 Children: ages 50, 48 and 45

Risk Tolerance:Low

Goal: Increase wealth transfer to children with reduced risk

Meet Catherine*This example is hypothetical, actual results will vary.

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The cost of doing nothing…

Note: Assumes Catherine lives an additional 17 years.5% is based on an annual rate of return.For Illustrative Purposes Only. Actual Results will vary.

Current value of Credit Shelter Trust $1,000,000

Value of CST in 17 years (at 5% rate of return) $2,292,018

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Proposed strategyReposition half of trust assets to Guarantee Advantage Universal Life with Coverage Continuation Rider

Note: Assumes Catherine lives an additional 17 years.

$500,000 single pay GAUL policy $1,312,461

Remainder kept in current investments (assuming 5% annual ROR)

$1,146,009

Value of LCST with GAUL policy $2,458,470

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Compare the results

$166,452 additional wealth created

All product guarantees are based on the claims-paying ability and financial strength of the issuing insurance company.

Note: Assumes Catherine lives an additional 17 years.

Current trust assets $2,292,018

Reposition half of assets to GAUL $2,458,470

Amount of increased wealth transferred $166,452

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Benefits to your client• Retains unwanted income in the

trust • Income tax-free death benefit for

trust beneficiaries• Tax-deferred growth of policy cash

value• Potential for death benefit

guarantees5

5All product guarantees are based on the claims-paying ability and financial strength of the issuing insurance company

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Benefits to you• Introduces you to future generations

of your most successful clients

• Deepens client relationships

• Potential for new sales

• May uncover additional assets

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Determine Premium Amount and policy type•Provide Client Personalized Illustration and Product Prospectus, if Applicable

6

Determine whether trust can purchase life insurance on surviving spouse• Evaluate investment alternatives for trust

• Economics of life insurance purchased in the trust • Determine insurability of surviving spouse

• Spouse should resign as trustee

5

Inventory Current Assets in Both Trusts4

Schedule Time for Client Meetings2

Identify and Qualify Clients1

Initiate Underwriting7

3 Discuss Wealth Transfer Goals with Client and life insurance needs

Determine whether trust can purchase life insurance on surviving spouse• Evaluate investment alternatives for trust

• Economics of life insurance purchased in the trust • Determine insurability of surviving spouse

• Spouse should resign as trustee and cannot have a power of appointment over the trust• Client to confer w/independent tax and legal counsel to ensure technique is appropriate in their particular circumstances

Initiate underwriting

Identify and qualify clients

Schedule time for client meetings

Discuss wealth transfer goals with client and life insurance needs

Inventory current assets in both trusts

Determine premium amount and policy type•Provide client personalized illustration and product prospectus, if applicable

Action plan

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MetLife Brand• One of America’s largest financial

companies with roots as far back as 1863• Serves over 90 of the top one hundred

FORTUNE 500® companies6

• Recognized as the Nation’s Largest Life Insurer7

6MetLife. Quick Facts: Full Year 20097Based on life insurance in-force as of December 31, 2008.

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Important InformationPursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances.

Prospectuses for Equity Advantage Variable Universal Life, and for the investment portfolios offered thereunder, are available from MetLife. The policy prospectus contains information about the policies features, risks, charges and expenses. Investors should consider the investment objectives, contract features, risks, charges and expenses of the investment company carefully before investing. The investment objectives, risks and policies of the investment options, as well as other information about the investment options, are described in their respective prospectuses. Clients should read the prospectuses and consider this information carefully before investing. Product availability and features may vary by state.

MetLife life insurance policies have limitations, exclusions, charges, termination provisions and terms for keeping them in force. There is no guarantee that any of the variable investment options in this product will meet its stated goals or objectives. The cash value is subject to market fluctuations so that, when withdrawn, it may be worth more or less than its original value. Guarantees are based on the claims paying ability and financial strength of the issuing insurance company.

MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances.

Life insurance products are issued by MetLife Investors USA Insurance Company, Irvine, CA, Metropolitan Life Insurance Company, New York, NY, and in New York only by First MetLife Investors Insurance Company, New York, NY. All guarantees are based on the claims-paying ability and financial strength of the issuing insurance company. Variable products are distributed by MetLife Investors Distribution Company, Irvine, CA. All are MetLife companies. February 2011

Insurance Products are:• Not A Deposit • Not FDIC-Insured • Not Insured By Any Federal Government Agency

• Not Guaranteed By Any Bank Or Credit Union • May Go Down In Value

BDVL21444 L0211161351[1212] © 2011 METLIFE, INC PEANUTS © 2011 Peanuts Worldwide