Restricted Property Trust

Looking Forward to Tax-Free Income

Restricted Property Trust

Restricted Property Trust

With restricted property trust, owners of a corporation create a RPT which is funded with 100% deductible contributions. The amount, depending on death benefit needs and retirement income goals, is flexible, and apart from providing tax deductions during funding, retirees can look forward to tax-free income.

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Money is Locked in for Minimum 5 Years

Restricted property trust is a retirement strategy where you need to lock money in for at least five years. Five years is the minimum and a longer commitment will mean higher yields. Those who commit to this retirement strategy could yield a return of some 9% over 10 years which would provide a safety net for beneficiaries in the event of death.

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This tax-favored, long-term asset accumulation strategy is popular with doctors and business owners, providing personal asset protection, income tax savings as well as death benefit coverage.

More Benefits

Fully tax-deductible contributions are made for each participant to a RPT by the business. The contribution funds an entire life insurance policy on each participant, with 30% of the contributions being current taxable income while the other 70% is not subject to taxation. Some of the benefits of the restricted property trust include –

-creditor protection

– contributions are 100% deductible to employers

– partners are able to choose a level of participation individually

– tax deferred growth of plan assets

– death benefit protection

For each year that the trust is in existence, contributions must be made and failure to do so will cause the life policy to lapse. The surrender proceeds are then given to a charity. However, while the trust is unimpaired , creditors can’t touch the whole life cash values and they increase without being subject to income tax. With death, the death benefit which isn’t subject to income tax is paid to a named trust beneficiary.

Contributions which will Culminate into Something Substantial

Depending on the trusts scheduled period, at termination the participant receives the whole life policy with only a portion of the cash value being subject to taxation. The restricted property trust is available to individuals with earned income and they can select their own level of contribution, regardless of what others are contributing.

Any corporation is eligible for RPT except a sole proprietor and only shareholders can make use of RPT. Contributions are 100% deductible for the business and 70% for the shareholder.

Securing a Decent Future For Yourself

If you think that RPT can be of benefit to your business, but you are undecided because of lack of information and advice, it is important to find a trusted, reputable and reliable insurer who is skilled at retirement planning and who has plans to fit your priorities and which can render financial benefits in your golden years.

But to get there requires making the correct choices from those with financial expertise, and MontRidge Insurance Services are trustworthy insurance brokers, they simply provide solutions to everyday problems such as taking care of your retirement needs.

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