Transferring Life Insurance and Related ReceivablesTransferring Life Insurance and Related Receivables

Valuing life insurance and related receivables is required in many situations: charitable giving, transferring policies out of defined benefit plans, transferring policies between trusts (the trustee has a fiduciary duty to get the best price) and transferring policies by gift or through an estate. Advisors are becoming much more aware that the policy valuations available from the life insurance carrier are inappropriate for the purpose of establishing fair market value (FMV): The cash surrender value (CSV), while setting a floor value, is often too low to be a true FMV estimate; likewise, the reserve values provided are often wildly off the mark in the other direction. 

What do you do if your client has transferred a life insurance polic...