Life Insurance Trust Explained w Ease of Understanding


there are many types of trusts that can provide financial advantages for you and your
family some offer control love how will be distributed to your heirs others create tax efficiencies by
positioning assets outside if your taxable estate and irrevocable life insurance trust can
do both an ILIT as it’s commonly called takes
your life insurance policies and moves them outside your estate and into a trust here’s how and I’ll it works and why it
can benefit your family when you create an ILIT you designate
the trust as the beneficiary of your life insurance policies the death benefit proceeds from your
insurance will become property of the trust you determine it and how those funds and the ILIT will
be used typically your spouse your children and
the charities have your choice will be the recipients of the trust
assets you decide who receives the assets and
when they will be dispersed you appoint a trustee to manage the
eyelid and ensure your wishes will be carried out according to your
instructions the cash inside the island can provide immediate
funds to your family to pay your final expenses and the state
taxes your heirs can avoid the need to
liquidate family assets like real estate or business interest to cover those
obligations ILIT assets will not increase your
overall the state tax burden the assets and the ILIT are held
outside your state so there’s a reduced exposure to estate
taxes and the possibility of greater wealth
transfer to future generations if you think an irrevocable life
insurance trust would be a value to you work with your financial advisor legal
and tax experts they can structure your ILIT to help
achieve your family schools you’ve worked hard to create your wealth you want to protect it so your family
can enjoy the benefits of your success

6 comments

Consider ILIT if you have special needs children or you want more control over assets and how those funds will be handled.

Check out this video on YouTube: Irrevocable Life Insurance Trust or ILIT. How it benefits you and your family.

Thanks for the share. Working on some ideas to help trustees/fiduciaries to reduce liabilities and communicate it in concise way.

Looking for resources that can help me better understand how I can use ILIT in conjunction with whole life policies to reduce tax liability from corporate dividends, as an executive.

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