This month, Jay sits down with Allison Hoyt, JD,CLU, TEP, Technical Director, Advanced Consulting Group, Nationwide. The pair discuss Allison's windy road to the life insurance industry, long-term care riders and ILITs, the coming changes to estate and gift tax exemption amounts, and volleyball! Read it all below.
JAY: The high-net-worth market segment of the life insurance industry depends upon the ability to call on technical experts who not only understand advanced life insurance applications but also how producers can apply that knowledge in the sales process. When I think of subject matter experts in our industry, Allison, your name is at the top of the list. I am thrilled you could participate inthe Tier One Interview Series and I am looking forward to hearing your thoughts on a couple of top-of-mind strategies.
First, tell me about your role at Nationwide in Columbus, Ohio, and the various hats you get to wear doing your job.
ALLISON: I like to say that I put the “sales” in advanced sales and help sell life insurance all day, every day. At Nationwide I am a Technical Director in the Advanced Consulting Group and I support anyone and everyone selling a Nationwide life insurance or long-term care insurance product - typically in more complex cases as you alluded to, which require knowledge of legal, tax, and financial concepts, including the alphabet soup of planning: ILITs, SLATs, GRATs, CRUTs, NQDC, and so on. I do this mainly through case consultations with wholesalers and financial professionals. Their conversations usually start with, “I’ve got a guy” or “I’ve got a gal” …. I also write marketing materials including white papers and presentations and travel around the country training financial professionals on these concepts.
JAY: What came as a complete surprise was hearing that you were a tenured public-school teacher and taught sophomores and seniors English for 4 years before going to law school. But that was not the only surprise. Walk me through where you grew up, went to school and your career path leading to your position with Nationwide.
ALLISON: I started teaching when I was 21 years old and fresh out of college. I taught sophomores and seniors and I learned the meaning of sophomoric and totally get why they call sophomores that! The seniors I taught were far more chill! I taught all levels of courses: remedial, “Regents,” honors, college level and electives where I designed original curricula.
Incidentally, Film Studies was my favorite course to teach and where I conducted a survey of the American Film Institute’s (AFI) Top 100 films from each decade. Every Friday, my students had to give a presentation on a film of their choice from that list and it had to be a film I had not covered.
I grew up on “Lawn Guyland” – that’s Long Island for those not from the area. My friend Amanda, whom I met in Columbus where I now live, is also from Long Island and she tells people she grew up on an island. I decided to steal that and often tell this to some folks who ask where I am from.
When I was 25, I had a quarter-life crisis and thought “Am I really going to spend the next 30 years of my life teaching Act III, Scene I from Hamlet?” Also, I wanted to make more money but admit to not understanding what a pension was back then. After obtaining tenure following four years of teaching, I decided to go to law school. Following graduation, I did a brief stint as a criminal defense and divorce attorney before entering financial services.
JAY: Wait, before I ask the next question, I have to know if being a criminal defense attorney is anything like we see on television?
ALLISON: (laughing) Depends what show you are talking about! I would say more like Better Call Saul than My Cousin Vinny, but I am going to plead the fifth on that one. I will tell you though, I was a darn good criminal defense attorney. I remember when a judge said to me, “There is no way the D.A. will agree to dismiss this case.” Guess what? I got the case dismissed. Another judge said to me, “The D.A. will not plead this DUI down to a violation.” Well, I got that charge reduced to a violation – even though my client nearly messed that up because there was a drug test she had to pass to get the reduction and that is a story for another time!
JAY: In 2020, I was fortunate enough to be accepted to your industry growth group, The Yale Club Insurance Study Group, which has been meeting continuously for over 80 years. You and the other nearly fifty members did not blackball me, and I am grateful because it gives me a monthly opportunity to hear fromsome of our industry’s brightest minds about various life insurance strategies.
One of the many areas for which I view you as a thought leader is on the subject of placing long-term policies and life insurance policies with long-term care riders into irrevocable life insurance trusts, or ILITs. Why is this such a hot topic and what do folks need to be careful about?
ALLISON: I think there was a lot of miscommunications on this topic which has led to some confusion, but to me the answer is clear: life insurance policies with long-term care riders and asset-based long-term care policies can absolutely be owned by an irrevocable trust. I think it is such a hot topic because the costs of long-term care have become endemic to old age and it does not matter if you are rich or poor – no one likes to write a six-figure check, and so the affluent and high-net-worth have become more interested in long-term care insurance.
I talk a lot about repurposing irrevocable life insurance trusts to address the cost of long-term care – especially relevant for those individuals or couples who are likely no longer exposed to the federal estate and gift tax, yet, have an ILIT. I also talk a lot about how, if you combine long-term care benefits with loans, long-term care planning can actually become another estate tax mitigation strategy. It is definitely a hot topic!
JAY: All of us in the industry know the estate tax is coming back in just over two years. I have been telling people that the very best estate planning attorneys will be “full up” on clients because of this and in addition to their regular work so, unless someone starts planning soon, it may be difficult to engage a decent attorney. Talk about what is going to happen with estate taxes and the message you are communicating about what this means and what people should do?
ALLISON: In a little less than two and half years at the end of 2025, the federal estate and gift tax exemption will be cut in half: from $10 million indexed for inflation, to $5 million indexed for inflation. Many expect the inflation adjusted figure to be somewhere around $6 million to $7 million when 2026 rolls around.
What this means is that many more individuals and couples will face federal estate tax exposure and, to the extent a relevant state estate tax is tied to the federal exemption, more will also face exposure to state estate taxes. As a result, more people should engage in life insurance planning since life insurance is a superior way to provide liquidity for any estate taxes owed.
This year, 2023, the exemption is $12.92 million per person. In the history of the U.S., it has never been this high. For all intent and purpose, it is a de facto repeal as very few individuals or couples pay estate taxes right now. I think we are going to look back on these last few years as the “golden age” of wealth transfer planning because, today, people who are fortunate enough can make a gift of the full $12.92 million exemption – double that amount for a couple. Our industry should encourage these people to make the gift because, if they do not, they will lose the opportunity to transfer roughly $7 million of wealth that will be gift, estate and generation-skipping transfer tax-free!
I agree that anyone needing to do any estate planning should speak with an experienced trusts and estate attorney as soon as possible, otherwise it may be too late to get this planning done. As you said, the decent attorneys will likely fill up first!
JAY: In the category of “I did not expect this,” you were a nationally-ranked competitive doubles volleyball player before you moved to Columbus five years ago. Wow! What activities are you and your family involved in outside of work?
ALLISON: My husband and I have a one-year-old daughter who is the best thing ever! As result, I only recently started to get back to the gym, yoga, and, yes, beach volleyball which, I technically have to call ‘sand’ volleyball because I live in Columbus! My husband and I try to get to yoga every Saturday.
We are very active in our community; I am the Treasurer for our local civic association and run two annual events for the neighborhood: National Night Out, and the community garage sale. My husband is an amateur beekeeper and is very active with multiple veterans’ organizations.
JAY: I absolutely enjoyed spending this time learning more about you, Allison. We have come to our famous restaurant question and as someone who attends and speaks at industry events all over thecountry, you are very aware of the reliance on steakhouses for entertaining.
Without naming a steakhouse or a steak dish, what are some of your favorite restaurants and what should I order when I am there?
ALLISON: My best dining experience of all time was at The Refectory which is a French
restaurant in Columbus, Ohio. It has been voted Four Diamond by AAA. The food is terrific, but the service and ambience are unmatched. They currently run a dinner music series as well as many wine tasting events. If you are in town when one of those is going on, you are in for a treat. The Refectory has two, five-course tasting menus, and I cannot wait to go back and try the vegetarian option…and I am not even a vegetarian!
Nationwide and its representatives do not give legal or tax advice. An attorney or tax advisor should be consultedfor answers to specific questions.
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Since its inception, Life Insurance Strategies Group has solely focused on the individual high net worth life insurance market. We do not sell products. This allows us to offer unbiased, pragmatic advice. Visit us at www.lifeinsurancestrategiesgroup.com.
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