The 831 (b)

Forming an 831 (b) captive is relatively easy. However, maximizing its corporate and personal wealth building potential takes insurance, accounting and legal skills.

The small insurance captive with the 831 (b) tax filing, like any tool, can lie dormant in the hands of a novice, or can create immense wealth and corporate competitive advantages in the hands of an expert.

Weaving its capabilities into the enterprise structure can have a positive financial affect by allowing expense reduction in some areas of risk financing, while permitting expense increases in others. How reserves are managed can also have a positive financial affect.

An enterprise can have more than one 831 (b) captive. The ownership structure of an enterprise may already allow for multiple captives, or the objective may require minor restructuring. External risk sharing is another avenue for creating single or multiple captives.

Use of the 831 (b) as an estate planning tool for high net worth individuals is gaining acceptance with financial planners, but utilizing its capabilities takes skill in the areas of insurance, finance and law.

Lee M. Hoffman & Associates, LLC, has the experience and knowledge to guide financial planners, attorneys, accountants, CFOs and CROs through the process of preparing an enterprise or high-net-worth individual to utilize one or more 831 (b) captives.