What are an ILIT’s components?

Irrevocable life insurance trusts (ILIT's) are used to: create an estate for heirs using life insuranceshield life insurance payouts from estate taxreplace assets given to charities or placed in IIOT's (Irrevocable Income Only Trusts)People often make the mistake of naming their estate as the beneficiary of their life insurance policy. This makes the proceeds of … Continue reading What are an ILIT’s components?

Why would I want my irrevocable trust to own my life insurance?

If you own life insurance, it is included in your taxable estate and the proceeds will be taxable for federal estate tax purposes. So, in 2009, an individual is allowed a federal estate tax exemption on their first $3.5 million of assets, including all life insurance policies in their name. (This fact comes as a … Continue reading Why would I want my irrevocable trust to own my life insurance?

What is an irrevocable life insurance trust?

An irrevocable life insurance trust (ILIT) is an irrevocable trust that is created to own and be the beneficiary of life insurance policies on the trust maker's life. A reason to use this type of trust is to remove the insurance proceeds from a person's taxable estate. Remember, that normally when you own a life … Continue reading What is an irrevocable life insurance trust?