Assignment of commissions

[theinsuranceman]

With Sr Life, if the agent passes the renewals start going to the beneficiary the agent listed in his/her contract (spouse for ex). There is also a contingent beneficiary. Neither beneficiary has to be licensed to receive the renewals. I thought all carriers did this. I learn something new every day...lol.

 

[DonP]

Only with mapd does the beneficiary have to be licensed plus they have to certify yearly .

 

[somarco]

With Sr Life, if the agent passes the renewals start going to the beneficiary the agent listed in his/her contract (spouse for ex). There is also a contingent beneficiary. Neither beneficiary has to be licensed to receive the renewals. I thought all carriers did this. I learn something new every day...lol.

OP did not mention dying, but they did say "if I leave the business".

Of course dying is tantamount to leaving the business . . .

 

[rousemark]

Perhaps it differs from state to state but in TN, most companies vest the renewals for the life of the business. If the agent quits he continues to receive the renewals and no requirement to service the business exists (service fees are never vested because service is required). Since the business is not required to be serviced there is no requirement for a person to be licensed to receive the renewals. That is the reason an unlicensed beneficiary such as the spouse can received the renewals or if there is no beneficiary, they will be paid to the agent's estate. Therefore, renewals should be able to be assigned to any entity the agent desires.

 

[Tahoe Ray]

What is the company structure? S corp, C corp, LLC, etc?

Each entity is treated differently.

Caveat - not an accountant just a forum gadfly . . .

An LLC can file as an S corp.

That's how my accountant has us set up and like @HoosierLife mentioned, the distributions aren't subject to self-employment taxes which ends up being a lot of money when all is said and done.

 

[somarco]

An LLC can file as an S corp.

That's how my accountant has us set up and like @HoosierLife mentioned, the distributions aren't subject to self-employment taxes which ends up being a lot of money when all is said and done.

I allowed Josh to get me off track from the forum topic about assigning commissions which has nothing to do with taxation.

LLC did not exist when I set up my agency.

 

[Tahoe Ray]

I allowed Josh to get me off track from the forum topic about assigning commissions which has nothing to do with taxation.

LLC did not exist when I set up my agency.

Threads never get off track on this forum so I'm very disappointed in you for doing so.

 

[rousemark]

Threads never get off track on this forum so I'm very disappointed in you for doing so.

 

[Newby]

You can’t assign commissions to an unlicensed entity. To be a licensed entity at least one of the owners must be licensed.

 

[somarco]

Threads never get off track on this forum so I'm very disappointed in you for doing so.

Threads may stay on track but my mind tends to wander . . . so did you sell your Tahoe or not?