Bridge Life Insurance: The Essential Liquidity Solution for Ultra-Affluent Estate Planning

For affluent and ultra-high-net-worth families, orchestrating a successful multi-generational wealth transfer is rarely a swift process. The design, execution, and eventual transfer of substantial assets often require a phased approach, taking anywhere from five to twenty years to fully implement. Every decision carries complex implications that can affect multiple generations.

The Critical Liquidity Gap During Estate Plan Implementation

Advanced estate planning strategies, such as Grantor Trusts, Family Partnerships, and intrafamily loans, are indispensable tools for minimizing estate tax exposure. However, these sophisticated structures take time to formalize and execute properly. Or, the process to sell or transfer your business will take time to execute.

During this crucial implementation (or waiting) phase, a critical question arises: How can a family guarantee immediate liquidity to the estate for settling taxes and other expenses while the long-term plan is still taking shape?

Liquidity is not merely a preference; it is essential for:

• Paying estate taxes.

• Balancing inheritances fairly among beneficiaries.

• Maintaining financial liquidity as tax laws and asset valuations fluctuate.

Understandably, many families hesitate to make large gifts or lock into major life insurance premiums until their complete estate plan is set and their future liquidity needs are clear.

TRC Financial's Bridge Life Insurance Solution for the Ultra-Affluent

To precisely address this "liquidity gap," TRC Financial offers a proprietary bridge life insurance solution for the ultra-affluent. This unique design is available through TRC Financial, and leverages proprietary products available through M Financial Group. This proprietary structure expertly leverages a flexible-premium life insurance product engineered specifically for the ultra-affluent market.

Key Advantages for Wealth Transfer

1. Flexible, Year-to-Year Premium Funding Our Bridge design allows families to minimize annual gifts and premiums during the early implementation phase. Policies can be funded year-to-year, ensuring maximum cash flow flexibility while complex estate strategies evolve.
   

2. Ultra-Affluent Product Design Built for our clients, this life insurance structure features institutional pricing, access to top decile fund managers (including Fidelity, DFA, Goldman Sachs, Vanguard, and PIMCO), and unique underwriting advantages not available through standard retail life insurance products.
   

3. Discreet Private Underwriting TRC Financial’s Private Underwriting process ensures unmatched privacy and efficiency. The entire underwriting process, including e-signatures and coordinated medical exams, can be completed entirely through a secure, confidential digital process.
   

4. Long-Term Future Optionality Once the estate plan is complete, families have full optionality. They can elect to keep, reduce, sell, or lapse the coverage, depending on their updated liquidity needs and evolving wealth-transfer goals.

Implementing the Bridge: Gifts or Loans

Depending on the family’s overarching tax and planning framework, the Bridge Life Insurance is typically funded through one of two structures:

• Bridge Life Insurance with Gifts: Utilizes annual exclusions ($19,000 per person in 2025) and the generous lifetime gift tax exemption ($15 million) per person to fund the premiums through an Irrevocable Life Insurance Trust (ILIT).
  

• Bridge Life Insurance with Loans: Allows funding through a private intrafamily loan using the applicable IRS Applicable Federal Rate (AFR). This strategy ensures compliance and is often favored to minimize immediate taxable gifts.

Both structures are highly effective, with the choice depending on whether the estate plan prioritizes immediate gift tax minimization or efficient lending.

A Solid Bridge to Your Legacy

Estate planning is a significant, complex, and deeply personal journey. TRC Financial’s Bridge Life Insurance strategy provides the vital, flexible liquidity solution needed during the years it takes to fully execute a multi-generational estate plan.

By minimizing early cash flow commitments, reducing initial gift exposure, and maintaining long-term optionality, this bespoke strategy empowers affluent families to move confidently toward securing their ultimate legacy.

Ready to discuss securing your estate’s liquidity? Contact us today to learn more about our proprietary solutions and how we can support your wealth transfer strategy.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. The tax and legal references attached herein are designed to provide accurate and authoritative information with regard to the subject matter covered and are provided with the understanding that neither TRC Financial, nor M Financial are engaged in rendering tax, legal, or actuarial services. If tax, legal, or actuarial advice is required, you should consult your accountant, attorney, or actuary. Neither TRC Financial, nor M Financial should replace those advisors.