Farmland Was Paid Off Until This ‘Strategy’ Created $38 Million in Debt (Ep. 363)

"This is still going on because somebody wants to line their pockets with commission and sell you an IUL or a universal life policy, and oh, it's gonna be wonderful. Wonderful until the fees are astronomical. Wonderful until it doesn't perform like it's supposed to perform. Wonderful until the interest accumulates to the point where that's compounding every year and eating everything up. Wonderful until we can't pay premium. Beyond frustrating."

Hello, hello, hello, and welcome back to the podcast. Thank you very much for being here. All right. Today, I really, really want you to share this podcast with every single person you know. I don't care if they think you're crazy, because if you're listening to this, you're probably already being questioned, you know? So let's just be honest. Everybody already thinks, "What are you… What is this guy thinking?"

However, I really, really want you to share this because I have talked about this for years, I have done podcasts on it. I've never had a case on it. Now we have a case, and there are people going around selling indexed universal life, they're selling universal life, they're selling variable universal life as an estate plan to avoid paying for estate taxes for the farm. I'm gonna come in, I'm gonna sell you some grand plan on land that is paid off, and they're premium financing stuff. We've gone over it before. This is now an active lawsuit, and this lawsuit, I looked it up, it's been going on for quite some time. This is an active lawsuit of this exact strategy that I have been screaming about for years.

I have actually reached out to a couple people in the industry that study this kind of stuff, and he replied back to me and said, "Yes, I saw the case, but I didn't know if it was just a one-off." And I'm like, "This is not a one-off." This is maybe a one-off case at the moment, but this is not going to be a one-off situation because there are agents out there that are vultures to people that have farm ground already paid off 100% debt-free, and they're saying, "Hey, you should be concerned about your estate taxes," okay?

"You should be concerned about inheritance tax. And so we are going to sell you a life insurance policy, and we are going to have the death benefit take care of that taxation. How are we going to do that? We're going to take the land that's paid off, and we're going to send you back to the bank, and we are going to have you borrow money against paid-off land so that you can save the farm."

Ridiculous. Will there be German passion today? Clearly, it's already coming out. We're gonna put clips of this out, and people are gonna be like, "Is that all you do is scream?" About this situation, yes, I am going to get extremely passionate, I'm going to scream, I'm going to be annoying. But if that is what makes you listen, then so be it.

All right, let's get into it. Iowa widow claims a premium financed IUL plan jeopardized the family farm. She is suing an advisor in Iowa, and two life insurance companies. Okay? What's interesting about all of this is I went in and looked up this Iowa life insurance agent. He is licensed in Iowa. His license is still active. Rightfully so, he's not been found guilty. He probably won't, to be all honest. But this suit was filed in November of 2024.

This guy does not have a website. Nowhere to be found. Cannot find him, okay? He has been in business since 1993. So this guy has been in business forever. And no website? Hmm, that's weird.

Well, you know, I have people in places, and I know things. And so I went to my people in their places, and I said, "Hey, can you see when a website was taken down?" And they're like, "Yeah, let me do some digging." So we looked him up. Isn't this interesting? His website was taken down somewhere between December of 2024 and February of 2025.

Lawsuit happened in December of '24. If we aren't guilty, why are we taking down our website? If somebody came after me because I sold them life insurance, I wouldn't be taking down my website because I'm not doing anything illegal. Unless — the only reason this would make sense is unless the insurance commissioner said, "You need to take your website down. You cannot have any marketing, anything. You can't have anything. You can't have a Facebook page. You can't have anything until this lawsuit is filed."

I don't know, because in order to get the records for this lawsuit, because yes, I dug that deep. In order to get the records for the lawsuit, I would have to drive my butt to Iowa, go to the courthouse, and get the public records. And I suppose I could ask a client to do that for me, but that's a big ask.

Anyway, here's the article. So the agent's last name is Davis. He engaged in a pattern of recommending to purchase and sale of annuity products within short periods of time commonly referred to as churning or twisting for the purpose of generating commissions.

So this is interesting because I don't know how this references the sale of IUL, because here's the thing with churning and twisting. This happens a lot in this industry. An agent will say, "You know what? I'm gonna go from ABC company to XYZ company, and when I do that, I'm gonna tell all of my clients to move from ABC company to XYZ company," even though the companies are probably the same.

This happened locally in a situation that I know. The agent went from ABC company to XYZ company. Both companies mutual, both companies paying dividends, both companies rated equally as good, both companies good companies. However, if I take them from ABC company to XYZ company, I make commission again off of the same person.

So when I do that as an agent, I'm going to tell the client, "That company's not that good anymore. Let's move to this other company. That's why I switched. They're a much better company. They're gonna pay higher dividends. They're gonna have a better rate of return," whatever BS we want to feed the client. And when they do that, they make commission.

So that's called churning, because there was no reason, absolutely no reason, that client had to move companies. So when we do, as an agent, when I see a b— bad policy, what I will call a bad policy, I'm going to give you options. You can save it, you can 1035 it, you can cancel it. I'm gonna outline everything that you can do. I'm gonna tell you what's going on in that policy, and then I am going to let you decide what you want to do, because I am not gonna get caught for churning.

Now, here's the crazy thing, you guys. Churning is not illegal. Twisting is not illegal. None of this is illegal. It is unethical, but it is not illegal and not a reason that we would lose our life insurance license. I know. Don't even get me… If that was the case, apparently this guy would have lost his license, because nothing else in this article says that he was churning her policies. So I don't quite understand why that piece is in there, but it's an important piece to bring up because they brought it up. Why would they bring it up?

All right. Now, it says, "According to the petition—" Mrs. Beek and her late husband spent decades building a farming operation that was debt-free by 2010. Okay? They had no debt. They consulted an attorney to create a series of trusts and referred them — the attorney referred them to Davis for life insurance planning.

And you know, when you get referred to somebody, you trust that person. Now, there's no speculation that the attorney is at fault here. I have referred people to people that have turned out not to be great people, and so I have gotten very guarded about who I refer people to. And when I start referring people, I then follow up with those people to see how's the customer service, how are they billing you, all the things.

Because if you are not going to get good customer service, or there's something funky, or they've said something funky, then it's questionable for me. So let's just take example Michelle Prather, right? We just did a three-hour podcast. We're gonna be doing another podcast on long-term care. I know a lot of people in the long-term care space, a lot.

Why do I use Michelle? Because I know that I can trust that she is going to take care of the person, and she cares about the person more than she cares about the commission. And she is servicing some of our clients for free because they already had long-term care, and she's just gonna take over whatever they had, and she's just gonna help them with it.

So you really need to make sure that who your person is referring is a good person. Talk back to the… Like, I would have maybe called the attorney back and said, "You know, this is what he's telling us," and maybe the attorney wasn't… I don't know. I don't know. Anyhow, okay.

Davis initially sold the couple a $5 million policy with annual premiums of $102,000 a year. That was in 2010. Beginning in 2012, he allegedly — I like how they always have to put that — allegedly recommended a series of larger IUL policies with Ameritas and Pac Life funded, pay attention here, funded through bank loans secured by the family's farmland. The lawsuit claims a controversial premium finance strategy. Each IUL policy was on the wife. She knew they were there to help with federal estate tax issues so that they could pass their farm onto their four children and not lose the farm to federal estate taxes.

So, this kills me. She allegedly was recommended a series of larger IUL policies. Allegedly, yes, mm-hmm. So you're telling me that the average Joe is gonna walk off the street and say, "I need you to sell me a bunch of IUL policies"? They knew specifically what they wanted. This is not alleged, people. This is obviously what he did. Nobody can go, "Oh, allegedly, Mary Jo sold somebody whole life." Yeah, obviously. You're coming to me and saying, "Hey, I wanna do business with you," so I sold you whole life, allegedly. You've got to be kidding me.

And here is where it proves exactly what I've been screaming about for two years. They used bank loans by the family's farmland to pay the premium. They went to the bank and they said, "Mr. Banker, can you please give me money so that I can pay the premiums on these IUL policies? I want to take a loan against my farmland."

And they probably didn't even tell the banker what they were doing, 'cause the banker would probably say, "That is the most asinine thing I've ever seen." So we've got paid-off farm ground, and we're gonna try to save the farm from the federal government. Unbelievable.

By 2014 the Beeks had purchased $23 million in coverage through these two life insurance companies, with annual premiums topping at $2.5 million a year. Those premiums were financed through loans that used the farm as collateral, exposing the land to rising debt and interest costs. The lawsuit claims the strategy was unsuitable because federal estate exemptions had risen sharply in the years after the policies were sold, reducing the family's projected tax burden. It alleges the original $5 million policy would have been sufficient to cover any estate taxes owed.

So they obviously bought these when the estate tax was low prior to Trump's first term, and then Trump raised it. Biden did not lower it. It stayed the same. It is still the same today. So now supposedly, they don't need this.

The complaint further alleges that the insurers and the agent failed to explain the risk of premium financing, including variable rate loan costs, the possibility of mounting collateral demand, and the danger that the family could lose its farmland if the policies underperform.

Beek's attorney say the death benefit of the policies has since grown to about $45 million, while the debt has climbed to roughly $38 million. The policy's cash value is now allegedly less than the outstanding loans.

This is exa— I mean, I couldn't give you a more exact example of what I have been sent by clients or talk to people about. Because we are going to pay annual premiums of $2.5 million.

So what happens is we go to the bank, and we borrow against our farm ground, and then we have to pay the bank back, right? So they say, "Oh, it's all good. You're going to borrow cash value, and we're going to pay the bank off." But nobody ever says that the loan in the policy has to get paid back or the interest only in that policy has to get paid back.

They're not telling the people this. How do I know? Because I've seen spreadsheets. I've got them in my emails. I just looked at one the other day again. I've seen two spreadsheets that show the strategy all laid out. There's an interest column on the loan, okay? But in the interest column, it does not compound from year to year. The interest never gets paid.

Premiums are shown in this spreadsheet that we're gonna pay premiums for, I don't know, three to five years, and then after that, premiums are not coming out of pocket. Where are the premiums coming from? Oh, the premium, we're gonna borrow cash value to pay premiums. So we have this loan in the policy that just is ever exceeding.

Did they borrow cash value in this case? This is what I'd like to know. The guy writing the article, he's not gonna be a life insurance agent, right? He's not gonna know how this works. He's left out quite a few details. I've emailed him. These guys never email back. Every single article I've ever wanted more information on, these dudes do not ever email back. If you're writing an article, why even put your name and address in there?

Anywho, so did they actually borrow cash value to pay the bank loan off? Was the bank loan a variable rate and the policy loan is a variable rate? Like, obviously, we owe the bank money because we now have debt against the farm ground. Because if the policy was collapsing and the farm was paid for, they would have gotten screwed, but not — they would still have their farm ground, right?

But now it sounds like they don't have their farm ground, and the policies have too much debt because we've borrowed the money to what? Pay premiums every year. So now the policy has too much debt that we can't even pay the farm ground off, and if we die, there's not enough death benefit. After the cash value loan is paid off, there's not enough death benefit to even pay the bank for the farm ground.

We're being told that we're trying to save a farm. We're gonna save a farm with this crappy premium finance strategy, and yet there's no farm to save.

The reason that this makes me mad is because the farming industry, the agriculture industry, I feel like it's my industry. These are my people. I know I can't serve you all. I know all of you aren't gonna listen. I know not everybody likes me. I don't care. This is my industry that I'm extremely passionate about, and this is the crap that's going on.

Because you are being sold an absolute 100% lie that we're gonna save you from estate taxes. And this strategy was happening just three to four years ago with an estate tax limit of what, $15 million?

And this is still going on because somebody wants to line their pockets with commission and sell you an IUL or a universal life policy, and oh, it's gonna be wonderful. Wonderful until the fees are astronomical. Wonderful until it doesn't perform like it's supposed to perform. Wonderful until the interest accumulates to the point where that's compounding every year and eating everything up. Wonderful until we can't pay premium.

Beyond frustrating.

Let's just say if I lived in Iowa, they would not let me be a juror in this case, but I would be in the courtroom every single time these people met. Because… And when you go online to really see, like, there's a lot. There's a lot of back and forth. There is even a protection order in place. Now, I don't know who the protection order is for, but would I like to know? Uh, yeah, I sure would. I sure would.

So if anybody is listening from the Iowa, and maybe you're an attorney, and you can get me the documents, or you got more information on this case, oh, by Jesus, would I love to know what is truly happening. Because this has got to stop. We're trying to save farm ground.

I'd like to know why this attorney is also not out there speaking. Was the attorney involved with the agent? Did the attorney — is he not familiar with whole life in— or with life insurance? He doesn't know what's good or bad? Or, like, obviously he did the estate plan, so he would know.

When you talk to attorneys, they're attorneys. They know law. They do not know life insurance. When you talk to an accountant, they know IRS, right? They know how to file a tax return. They do not know life insurance. When you talk to me, I know that I should send you back to your accountant. I know that I should send you to an attorney. I know that I can give you things to ask the attorney and the accountant, but I am neither one of those people.

So do I have accountants that I can call? Sure do. Do I have attorneys that I can call? Sure do. Do I have people in estate planning that I can call, like Heidi Olson from Pathfinder Legacy? Sure do. Do I have people like Michelle for long-term care? Yep.

Mary Jo, why don't you do it all? Because you can't do it all and be good at it all. I am good at life insurance. People, we need to understand that these so-called professionals do not always know everything. Much like if you go to the doctor, you shouldn't maybe believe the very first physician that diagnoses you with something. You may want another opinion.

If you are being presented with this kind of crap, if you have family members that are presented with this amazing strategy, please just email me, whatever. I am happy to look at it. If you're not a client, I am still happy to look at it, and heck, you know what? The strategy actually works when you maybe use the right product if you do it correctly.

I know people that do premium financing through whole life. I don't do it because I do not see how it is going to help in agriculture. I don't see it. How are you supposed to continue to pay premiums of two and a half million dollars a year on 2,100 acres? 2,100 acres is not going to produce the amount of income needed to pay those premiums.

So those premiums had to get paid from what? Loans. But I guarantee you, nobody explained this to the Beeks, 'cause had they, they would have said, "Oh my gosh, I've never made that much money in my life in a year. There's no way we can continue to pay those premiums."

Oh, I can't. I'll beat this dead horse all day.

All right. Please share this. Please inform your friends, your family, even do the neighborly thing and let your neighbors know. Like, if you're going to be doing some sort of estate planning, let's do it, but let's do it right so we don't lose the farm because of the estate plan.

I know, again, I've said this a million times, it's not your job to know insurance. It's not your job to be a life insurance agent. It's not your job to be an accountant. It's not supposed to be your job to be an attorney. But we do need to be educated enough that we don't fall for some of these scams.

All right, you guys, if you have something, if you have questions on anything, just email me, maryjo@withoutthebank.com. John can also look at these things for you, so you can email john@withoutthebank.com. Either one of us would be super happy to look at what you've got going on. We will most likely work on it together.

The last one of these that I was sent, I called a colleague because I was like, "I have never seen this strategy." It was just one more piece of complication in there, and he's like, "Oh yeah," we kind of worked through it together. This is what they were doing. Like, we had to piecemeal everything together. Again, it was all for estate planning. We're gonna save the farm from estate taxes, and the client was never told he was taking a loan, or he forgot he was taking a loan, whatever.

If these agents are doing the right thing, they should be videoing their meetings and recording those and saving them so that people know where they're at. Send us the information. We're happy to look at it. We're happy to give you our two cents, at least present ideas for you, okay? And then we can go from there.

If you need anything, you know where we're at. You grab your book, get started, and then let us know. You have a fantastic rest of your day.