Why Use An Irrevocable Life Insurance Trust?
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63333 POINTSview profilePeggy MaceMost of the U.S.An irrevocable life insurance trust can protect the death benefit proceeds from estate taxes. However, an irrevocable life insurance trust has many strings attached, not the least of which is that the person making the trust cannot make changes to the beneficiary of the policy. So visit with a knowledgeable agent, lawyer or tax professional when deciding whether an irrevocable life insurance trust is a good idea for your estate.Answered on May 13, 2013flag this answer
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaIf your federal estate obligations or state of residence tax exceeds the unified credit or state exemptions, you may want to consider using an Irrevocable Life Insurance Trust (ILIT). If designed and set up by an estate tax attorney, an ILIT can hold a life insurance policy and distribute those death benefit proceeds to the trust beneficiaries’ tax free. If the life insurance were held in the estate, the proceeds were more than likely be subject to estate taxation at the second death of a married couple. Before moving forward with an ILIT seek out professional advice.Answered on May 13, 2013+01+1 this answer
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11783 POINTSContact Meview profileLarry GilmorePROAgent Owner, Gilmore Insurance Services, Marysville, Washington StateWhy use an irrevocable life insurance trust? The main reason is to transfer the asset (life insurance is an asset) out of the direct ownership of the insured. Why? While life insurance is income tax free in most all situations, it is not estate tax free when adding up all assets subject to estate taxes. For a person who may have an estate tax liability, an insurance trust makes good sense. Making it irrevocable just clearly makes a line of separation from the policy owner and their other assets.Answered on May 13, 2013+01+1 this answer 0flag this answerview more answers by Larry Gilmore
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