In this context, an exit strategy simply means a plan to repay the loan. ?And such a plan is critical to the successful use of premium finance.
In many cases, the exit strategy will be that assets will be sold at some point in the future and the cash from the sale will be used to repay the loan.
Another common exit strategy involves use of a grantor retained annuity trust (GRAT), which could have the benefit of removing significant assets from your taxable estate while allowing you to accomplish your exit strategy from the premium finance.
Excerpt from The Complete Guide to Estate and Financial Planning in Turbulent Times (Collaborative Press, 2011) - Walt Dallas, Contributing Author
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