For producer use only. Not for distribution to the public. Foreign Nationals Planning: Making it Simple for Producers James Hahn Vice President, Sales

For producer use only. Not for distribution to the public.

Foreign Nationals Planning: Making it Simple for Producers

James HahnVice President, Sales

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For producer use only. Not for distribution to the public. 2

2010 Transamerica Producer Road Shows

Resources for Life:Approaching Clients and seizing Opportunities in Today's Market

CharlotteSeptember 15Charlotte Marriott South Park

Kansas CitySeptember 29Marriott Country Club Plaza

ChicagoOctober 14Westin O'Hare

PhoenixSeptember 16Scottsdale Plaza

HartfordOctober 12Hartford Marriott Farmington

IrvineOctober 26Location TBD

Ft. LauderdaleSeptember 28Westin Fort Lauderdale

PhiladelphiaOctober 13Crowne Plaza Hotel

SeattleOctober 27Seattle Marriott Waterfront



Andrea Valdez-Brandon, J.D. CLUAdvanced Marketing Consultant

Vicki GarrettSenior Underwriting Consultant, International Underwriting

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Importance of Estate Planning for Foreign Individuals

Expanding global economy

Need for planning

Impact of U.S. transfer taxes


Defining the Market

Metropolitan Area % of Population that is Foreign Born

Total USA 12.4%

Miami-Fort Lauderdale-Pompano Beach, FL 36.9%

Dallas-Fort Worth-Arlington, TX 17.7%

San Diego-Carlsbad-San Marcos, CA 23.0%

Los Angeles-Long Beach-Santa Ana, CA 34.6%

*The foreign-born population includes anyone who was not a U.S. citizen or a U.S. national at birth.This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census Bureau, American Community Survey 2007 Subject Definitions).

Source: U.S. Census Bureau, 2005-2007 American Community Survey


Survey Question Asked% Who

Answered Yes

Before emigrating to the U.S. those who sought advice as to the consequences of acquiring a U.S. residency for U.S. gift and estate taxes

34.5%

Obtained advice for making gifts of non-U.S. property prior to coming to the U.S. 10.9%

After emigrating to the U.S., those who sought tax advice 49.6%

Of the above group, those who sought advice on U.S. estate planning that could minimize estate taxes 6.8%

Planning Opportunities

A survey of recent immigrants to the U.S. with net worth of $10 million or more found:

Source: “Clueless,” Trusts and Estates, December 2003


U.S. Transfer Tax: Basis of Application

Citizenship

Worldwide assets subject to transfer tax

Residency

Non-U.S. Citizen with U.S. Home: non-citizenliving in U.S. permanently

Worldwide assets subject to transfer tax

Non-U.S. Citizen (aka, Foreign National): non-citizen who does not live in U.S.

Only assets in U.S. subject to transfer tax


U.S. Tax Treaties with Foreign Countries

U.S. income, gift, and estate tax treaties with somecountries may preempt general U.S. estate and gift tax rules

Some countries with which the U.S. has gift tax treaties: Australia, Austria, Denmark, France, Germany, Japan, United Kingdom

Some countries with which the U.S. has estate tax treaties: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, Norway, South Africa, Switzerland, United Kingdom


Unlimited Marital Deduction

No Deduction

Estate Tax Case Study

U.S. citizenJohn Davis

Non-U.S. citizenJudy Sevilla-Davis

No DeductionUnlimited Marital Deduction


What are Judy’s options if John dies in 2011 and the couple has no estate plan?


U.S. citizenJohn Davis

Non-U.S. citizenJudy Sevilla-Davis

QDOT




Nanette Rousseau

Non-Resident Alien Unmarried $14,000,000 in U.S. based

Commercial real estate

What can Nanette do to minimize exposure to U.S. estate and gift tax?




Non-U.S. citizenNanette Rousseau

CommercialReal Estate

Property

Corporation

Nanette's EstateNanette's Estate

Beneficiary 2

Beneficiary 2Beneficiary 1


Nonresident Aliens: U. S. Gift and Estate Tax Rules

* A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included within the decedent’s estate.

Type of property transferred

Subject to U.S. Gift tax

Subject toU.S. Estate tax

Real property located in U.S. Yes Yes

U.S. tangible personal property (i.e., cash, jewelry, paintings, automobiles) Yes Yes

U.S. intangible personal property (i.e., stocks in U.S. corp., interest in U.S. partnership)

No Yes

Ownership interest in a U.S. life insurance policy on the life of another No Yes

Ownership interest in a U.S. life insurance policy on oneself No* No


Foreign National Underwriting FAQs

Vicki GarrettSenior Underwriting Consultant,

International Underwriting


Basic Rules

Policy must be signed in the U.S. by the owner and the insured

No solicitation or sale may take place outside of the U.S.

Premiums must be paid in U.S. dollars

Policy delivery needs to take place in the U.S.

Medical underwriting generally takes place in the U.S.


Underwriting

An exam may be done outside of the U.S. only on a case by case basis

Prior approval must be obtained from the Director

Approval e-mail needs to be submitted with the Application


Attending Physician’s Statement

All documents must be completed in English

Some medical records may be translated in-house: Spanish, Portuguese, French and Chinese

Other languages will require a translation service


Premium payments

Payments should be made from a U.S. bank

Many foreign banks will have a U.S. affiliate


Maximum Coverage Amount

No Jumbo limit for foreign nationals

Difficult to obtain support for amounts of $20 million and above


Auto Bind Capabilities

*Including England, Scotland and Wales, but excluding Northern Ireland

Countries eligible for auto bind risk (for U.S. or Canadian Citizens up

to $35,000,000 of death benefit):

Andorra, Argentina, Australia, Austria, Barbados, Belgium, Bermuda, Brazil, British

Virgin Islands, Chile, Denmark, Finland, France, Germany, Hong Kong, Greece,

Ireland, Italy, Liechtenstein, Luxembourg, Mexico, Netherlands, New Zealand,

Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Taiwan

United Kingdom*

All other countries and Non-U.S./Non-Canadian citizens require

reinsurance support.


Maximum Retention

Maximum retention = $5 million

First $1 million is retained and reinsurance support sought for anything over $1 million

If reinsurance support is not obtained, we may fully retain up to $5 million on a case by case basis


Underwriting Documents

Signed application

Copies of visa/green card

Foreign Nationals & Foreign Travel Application Supplement


Underwriting Guidelines for Mexican Nationals

Premium notices must be mailed to a U.S. address

Best class is standard for Mexican nationals living in Border towns Monterrey State of Michoacán

Transamerica can offer best class to Mexican citizens residing outside of those areas

Payments must be made outside of Mexico

No solicitation can be done in Mexico


Underwriting Guidelines for Mexican Nationals: Border Towns

Tijuana, Nogales, Ciudad Juarez, Nuevo Laredo, Reynosa, Monterrey, Matamoros and the State of Michoacán

All other border towns will be considered on a case by case basis


Non-insurable Foreign Nationals

No published list available

Inquiries can be sent to [email protected] and a response will be sent back within 24 hours

mailto:[email protected]


Underwriting Standards

Normal age and amount requirements apply

Copy of Visa

Travel & Residency Questionnaire


U.S. Citizens and Foreign Travel

Travel is less than 183 days annually

Appropriate action will be taken for future travel to countries listed as declinable or rated destinations

States with legislation that does not allow us to rate or decline for travel: California, Colorado, Connecticut, Florida, Georgia, Illinois, Massachusetts, Minnesota, Missouri, New Jersey, Tennessee, Virginia, Washington (state)


Tools and Resources


Save the Date: September 14

Next Tip-Off:Why Insurance Professionals Should Sell Qualified Plans

29


This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here.

Transamerica Insurance & Investment Group (“Transamerica”) and its representatives do not give tax or legal advice. This material is provided for informational purposes only and should not be construed as tax or legal advice. Clients and other interested parties must be urged to consult with and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here.

Discussions of the various planning strategies and issues are based on our understanding of the applicable federal tax laws in effect at the time of presentation. However, tax laws are subject to interpretation and change, and there is no guarantee that the relevant tax authorities will accept Transamerica’s interpretations. Additionally, this material does not consider the impact of applicable state laws upon clients and prospects.

Although care is taken in preparing this material and presenting it accurately, Transamerica disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it. This information is current as of July 2010.

Transamerica Financial Life Insurance Company is authorized to conduct business in New York.Transamerica Life Insurance Company is authorized to conduct business in all other states.

OL 2055H 0810



Andrea Valdez-Brandon, J.D. CLUAdvanced Marketing Consultant

Vicki GarrettSenior Underwriting Consultant, International Underwriting

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