Released on = February 13, 2007, 11:00 am

Press Release Author = Shazaaam LLC

Industry = Financial

Press Release Summary = Keego Harbor, Mich.-. In the twenty-five years that Keith
L. Mohn, CLU, CHFC has been creating asset management plans and compensation
strategies for physicians and other business owners, he has seen financial planning
techniques come and go.

Press Release Body = Contact: Adrienne Lenhoff-Wise
Phone: 248-366-0388
Email: alenhoff@shazaaam.com

FOR IMMEDIATE RELEASE

Keego Harbor, Mich.-. In the twenty-five years that Keith L. Mohn, CLU, CHFC has
been creating asset management plans and compensation strategies for physicians and
other business owners, he has seen financial planning techniques come and go. "From
the massive changes in the tax code enacted under ERISA in the mid-seventies through
today's Pension Protection Act, one thing has become certain," says Mohn. "Death and
taxes aren't the only things we can count on. Here to stay is also a constantly
changing business, regulatory and economic environment, one through which planners
must constantly navigate in order to provide advantageous money management to
clients."

Having focused on high net worth individuals, business owners and medical
professionals since 1983, Mohn, says advisors like him must continue to give
significant attention to traditional segments of planning, like changes in estate
and pension law. However, in Mohn's view, there is an area of asset management that
few advisors and almost no clients even consider as a vehicle for enhancing their
wealth transfer goals. "That is the small insurance company or captive," says Mohn.
Mohn is convinced that for a certain class of clients, financial strategies that
include a captive insurance company can provide more powerful and significant wealth
accumulation benefits than traditional approaches.

"Using a captive insurance company approach in planning is absolutely not for
everyone," emphasizes Mohn. "But for the client who fits my 'captive profile,'" he
adds, "this strategy can quite possibly be the 'Holy Grail' of planning."

Who is the typical candidate for this money management tool? Mohn says it is a
successful business owner or a professional with stable, predictable income and
profitability in excess of $500,000 per year (after lifestyle expenses). Benefits
of a captive for this kind of client are many and far-reaching. First, a client's
corporation may be able to deduct up to $1.2 million per year and convert current
income into capital gains income. The corporation can create a pre-tax (tax
deductible) war chest to protect the business against any disaster. Finally, the
captive enables corporation owners to self-insure, with pre-tax dollars, certain
risks that are not currently insured, secure in the knowledge that their large and
growing deductible war chest is not accessible to creditors or owners or the
business

Captive insurance companies are not a new technique in asset management. In fact
some estimates have over 80% of the Fortune 500 companies utilizing captives for
various reasons, mostly to manage risk more efficiently. While captive insurance
companies come in many forms, they also are regulated as such. The Internal Revenue
Code (IRC), allows for certain benefits for small non-life companies that qualify
under two particular IRC sections: 501(c)15 and 831(b). In fact the benefits under
these regulations were revisited by congress with legislation as recently as
November of 2004.

Simply stated, a captive insurance company (CIC) is one that purely underwrites the
risks of the other companies owned by the same owner(s) as the insurance company.
For example, a group of doctors may form a CIC to underwrite tasks associated with
their practice, physical facility or other related businesses they may own.
Frequently, the types of risks should be risks for which ordinary commercial
insurance cannot be obtained cheaply or easily.

Here are a few examples of risks that may be covered by a CIC:
. Administrative Actions Insurance
. Computer Equipment and Data Recovery Insurance
. Loss of Key Employee Insurance
. Employee Practices Liability Insurance
. Executive/Professional Liability Insurance
. Business Income Loss (Contracts)
. Litigation Expense Insurance
. eCommerce Risk Insurance
. Directors and Officers
. Kidnapping and Ransom Insurance
. Sexual Harassment Insurance
. Income Tax Indemnity Insurance
. Deductibles/Gap Coverage

A significant non-tax benefit of a CIC is that while policy terms may be tailored to
meet certain events, the policies can also be labeled as "litigation expense only"
policies, providing only legal fees and litigation costs. This effectively creates
the war chest to fight lawsuits with pre-tax funds, while protecting the assets
against claim. Premium payments effectively remove or deplete the assets of the
business being underwritten or insured. Every dollar of premium paid to the CIC has
been moved out of the business and away from creditors of that business.

A good captive arrangement can protect profits of the business against loss.
Because premium payments are made "for value" it becomes very difficult for any
creditor to prove a fraudulent transfer.

This leads to the advantages of asset protection and the statutory protection
afforded captives. Insurance companies enjoy a very high level of statutory
protection for the reserves of the company due to the requirement to protect the
policy owners and to insure that the company will always be able to meet its claims
responsibilities. Captive insurance companies are no different. Creditors of the
owners are not in the position to force judgments against owners in personal
judgments.

Here is another benefit. When the captive is no longer needed, owners can simply
terminate the corporation, distribute the assets, declare gains as capital gains and
pay the tax. For this reason, the entity enjoys better tax benefits than those
afforded to qualified retirement plans and other compensation strategies.

Captives formed under 831(b) are structured as "C" corporations for tax purposes.
The election to be taxed as an 831(b) on the tax form is quite like making the
election to be taxed as an "S" corporation. It's simple and straightforward. As
long as all the insurance company rules have been followed in the formation of the
entity, the reporting for tax purposes is very straightforward. Caution must be
taken in the process of establishment of the company to insure full compliance with
the requirements of insurance company regulations and rules that protect the
benefits afforded to insurance companies. Formation as well as ongoing
administration are somewhat complex and require working with professionals who have
experience in this particular section of the code.

In summary, the CIC as a planning tool for the high net worth business owner or
professional can be the most powerful piece of the planning pie if structured
properly. Compared to traditional methods of accumulating wealth, such as qualified
retirement plans to name just one, the captive insurance company offers tax
benefits, asset protection, wealth accumulation, as well as opportunities to
efficiently transfer wealth to next generations far in excess of any other planning
methods. Professional guidance and assistance are an absolute necessity, here, as
insurance industry regulations and rules apply. Clients who fit the fact pattern
metrics would do well to consider including this approach to investigate and
determine appropriateness for a particular situation.

Keith L. Mohn, CLU, CHFC is a financial consultant and lecturer, and President of
Benefit Solutions Group. LLC, in Keego Harbor, Michigan, a full service financial
consulting and planning firm specializing in the advising of high net worth
individuals, business owners and medical professionals since 1983. Mr. Mohn is a
charter member of the Wealth Preservation Institute. For more information on
Captives and other business planning information, Mr. Mohn can be reached at
248-681-9320, or via his website www.benefitsolutionsgroup.biz.





DETAILED CONTACT INFORMATION
Benefits Solutions Group, LLC
Office Address:
3477 Orchard Lake Road
Keego Harbor, MI 48320
Phone:
248-681-9320
Email: keith@benefitsolutionsgroup.biz
Website: www.benefitsolutionsgroup.biz


Web Site = http://www.benefitsolutionsgroup.biz

Contact Details = Adrienne Lenhoff-Wise
27764 Franklin Road
Southfield, MI 48034
248-366-0388