An irrevocable life insurance trust can be used to protect life insurance proceeds from estate taxes and provide benefits to heirs. The trust is funded by purchasing a new life insurance policy or transferring an existing one. The grantor makes annual gifts to the trust, subject to beneficiaries' withdrawal rights, to pay premiums. Upon the grantor's death, proceeds pass estate and income tax-free to trust beneficiaries for uses like replacing income or funding a family business.
Life Insurance Trusts and Charitable Planning Techniquesscoop85
Learn techniques to provide protection for life insurance proceeds against estate tax exposure and creditors, and how to integrate charitable planning techniques that benefit the client and their family as well as selected charities.
Using Life Insurance in Zero Tax Estate Planningwardwilsey
This presentation describes the uses of life insurance in estate plans designed to eliminate the estate tax. For a version with audio as well, please email me at wardwilsey@wilseylaw.com
Life Insurance Trusts and Charitable Planning Techniquesscoop85
Learn techniques to provide protection for life insurance proceeds against estate tax exposure and creditors, and how to integrate charitable planning techniques that benefit the client and their family as well as selected charities.
Using Life Insurance in Zero Tax Estate Planningwardwilsey
This presentation describes the uses of life insurance in estate plans designed to eliminate the estate tax. For a version with audio as well, please email me at wardwilsey@wilseylaw.com
This is a real basic presentations about the application of an Irrevocable Life Insurance Trust to estate planning. If you would like a copy of the slides with my in depth audio presentation, please email me at wardwilsey@wilseylaw.com
This webinar was presented by Aaron Dunn and Ian Glenister from The SMSF Academy, looking at the important aspects of death benefit nominations for members of a self-managed super fund.
Requirement of insurable interest for life insurance SharfaKhan1
The ppt aims to showcase the essentiality of a claim having a vested insurable interest and the features of insurable interest and the case laws relating to the same.
Active Capital Reinsurance Ltd commenced operations in 2007, mainly providing credit-related reinsurance solutions to financial institutions in Latin America, and it has a general insurance and reinsurance license issued in Barbados.
An insurance claim is a request of a policyholder to an insurance company to compensate the policyholder for an expense or loss. Based on its analysis, the insurance company may either accept or validate the claim or reject it.
Insurance coverage is said to indemnify a policyholder. In other words, indemnify means to exempt or protect from a liability. A policyholder may be an individual or a group of individuals such as the employees of a corporation. In exchange for the protection of an insurance policy, the policyholder pays a premium. This is a regular payment made to the insurance company.
For consumers, there are three main types of insurance claims: health, life, and property. Health insurance is meant to cover major medical expenses such as surgery and inpatient expenses to such an extent that the policyholder is protected from life-changing financial setbacks in the event of an accident or serious illness. More comprehensive health policies will also cover doctor's visits and other relatively minor outlays. Life insurance provides for the financial welfare of identified beneficiaries in the event of the death of the policyholder. With this type of policy, there is typically a caveat that the death must not be due to criminal activities or suicide. Property insurance typically takes the form of homeowner's insurance, as the house would most likely be the single largest asset of a policyholder in his or her lifetime.
What are your rights when you're a beneficiary of a trust? What if you're NOT the trustee, but only the beneficiary, and you are having trouble getting information from the trustee. You see the trustee is responsible for administering the trust on behalf of the beneficiaries - not for themselves, unless the trustee also happens to be a (or one of) the beneficiaries too. Are they as beneficiary confusing their duty as trustee and vice versa.
The Best Way to Buy Sell or Replace Life Insurancefreddysaamy
http://ekinsurance.com/pennsylvania-life-insurance/
Traditionally, life insurance is purchased during your working years to replace your income for your family in case you died. But if you are retired, do you still need life insurance?
Life Insurance is a form of risk management primarily used to transfer the risk of uncertain loss.
It provides compensation for financial loss only not profit.
Life insurance is a protection against the RISK of financial loss that would result from the premature death of an insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The death benefit is paid by a life insurer in consideration of premium payments made by the insured.
This is a real basic presentations about the application of an Irrevocable Life Insurance Trust to estate planning. If you would like a copy of the slides with my in depth audio presentation, please email me at wardwilsey@wilseylaw.com
This webinar was presented by Aaron Dunn and Ian Glenister from The SMSF Academy, looking at the important aspects of death benefit nominations for members of a self-managed super fund.
Requirement of insurable interest for life insurance SharfaKhan1
The ppt aims to showcase the essentiality of a claim having a vested insurable interest and the features of insurable interest and the case laws relating to the same.
Active Capital Reinsurance Ltd commenced operations in 2007, mainly providing credit-related reinsurance solutions to financial institutions in Latin America, and it has a general insurance and reinsurance license issued in Barbados.
An insurance claim is a request of a policyholder to an insurance company to compensate the policyholder for an expense or loss. Based on its analysis, the insurance company may either accept or validate the claim or reject it.
Insurance coverage is said to indemnify a policyholder. In other words, indemnify means to exempt or protect from a liability. A policyholder may be an individual or a group of individuals such as the employees of a corporation. In exchange for the protection of an insurance policy, the policyholder pays a premium. This is a regular payment made to the insurance company.
For consumers, there are three main types of insurance claims: health, life, and property. Health insurance is meant to cover major medical expenses such as surgery and inpatient expenses to such an extent that the policyholder is protected from life-changing financial setbacks in the event of an accident or serious illness. More comprehensive health policies will also cover doctor's visits and other relatively minor outlays. Life insurance provides for the financial welfare of identified beneficiaries in the event of the death of the policyholder. With this type of policy, there is typically a caveat that the death must not be due to criminal activities or suicide. Property insurance typically takes the form of homeowner's insurance, as the house would most likely be the single largest asset of a policyholder in his or her lifetime.
What are your rights when you're a beneficiary of a trust? What if you're NOT the trustee, but only the beneficiary, and you are having trouble getting information from the trustee. You see the trustee is responsible for administering the trust on behalf of the beneficiaries - not for themselves, unless the trustee also happens to be a (or one of) the beneficiaries too. Are they as beneficiary confusing their duty as trustee and vice versa.
The Best Way to Buy Sell or Replace Life Insurancefreddysaamy
http://ekinsurance.com/pennsylvania-life-insurance/
Traditionally, life insurance is purchased during your working years to replace your income for your family in case you died. But if you are retired, do you still need life insurance?
Life Insurance is a form of risk management primarily used to transfer the risk of uncertain loss.
It provides compensation for financial loss only not profit.
Life insurance is a protection against the RISK of financial loss that would result from the premature death of an insured. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured. The death benefit is paid by a life insurer in consideration of premium payments made by the insured.
Advanced Markets Insight: Common Life Insurance MistakesM Financial Group
Life insurance can be used to accomplish many important planning objectives. However, if improperly managed, policy proceeds may be inadvertently subject to estate, gift, or income tax. An understanding of life insurance products and tax laws, as well as planning mistakes to avoid, will help to maximize the value of the life insurance asset.
"How to transfer your wealth to the next generation through estate planning" took place on April, 8th at the Tower Club, Vienna, VA. Our special guests were Mr. Milton Buffington and Mr. Saeid B. Amini, two well known experts that shared, for two hours, their experience on identifying legal issues and mechanisms that businesses and individuals can use to transfer their wealth and assets more efficiently, to the next generation.
This was a complimentary seminar hosted by Saeid B. Amini and Milton Buffington through the courtesy of Provanedge Financial and Richard B. Osmann, Ed.D.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
2. Ask Yourself…
2Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
Do you want to protect the value of your
estate from shrinkage due to the payment of
estate settlement costs at your death? Do you want your family to have funds
available to replace your earning power at
your death?
Do you want to make plans to provide for
your children from a prior marriage at your
death? Will your heirs need cash to continue
operating a family business at your death?
Do you want to make a substantial gift to
charity, without depleting the size of your
estate that passes to your heirs?
Would you like the value of insurance
proceeds on your life to pass to your heirs
transfer tax free and outside of probate?
If the answer to one or more of these questions is "yes,“ then an irrevocable life insurance
trust may be the solution.
?
3. What Is a Trust?
3Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
The word "trust" is applied to all types of relationships,
both personal and business, to indicate that one person
has confidence in another person.
For our purposes, a trust is a legal device for the management of property. Through a trust,
one person (the "grantor") transfers the legal title to property to another person (the
"trustee"), who then manages the property in a specified manner for the benefit of a third
person (the "trust beneficiary"). A separation of the legal and beneficial interests in the
property is a common denominator of all trusts.
In other words, the legal rights of property ownership and control rest with the trustee, who
then has the responsibility of managing the property as directed by the grantor in the trust
document for the ultimate benefit of the trust beneficiary.
A trust can be a living trust, which takes effect during the lifetime of the grantor, or it can be a
testamentary trust, which is created by the will and does not become operative until death.
In addition, a trust can be a revocable trust, meaning that the grantor retains the right to
terminate the trust during lifetime and recover the trust assets, or it can be an irrevocable trust,
meaning that the grantor cannot change or terminate the trust or recover assets transferred to
the trust.
4. What Is an Irrevocable Life Insurance Trust?
4Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
While there are many different types of trusts, our focus is on an irrevocable life insurance trust… a trust
with the primary purpose of owning a life insurance policy in order to remove life insurance proceeds
from the taxable estate and, as a result, avoid paying estate taxes on those proceeds.
The objective of an irrevocable
life insurance trust is to
remove life insurance
proceeds from the taxable
estate so that the beneficiaries
receive the entire amount,
undiminished by estate taxes.
While life insurance proceeds usually pass to the beneficiary free of federal income tax, they are subject
to federal estate tax if included in the insured's estate at death. If the estate exceeds a certain value,
this means that a portion of the life insurance proceeds, if included in the taxable estate, could go to
pay federal estate taxes instead of being available to the beneficiaries:
If you
die in:
And the value of your
estate exceeds:
Your taxable estate is subject
to tax rates from/to:
2013
$5,250,000 (as indexed
for inflation)
18%/40%
5. How Is an Irrevocable Life Insurance Trust Funded?
5Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
An irrevocable life insurance trust can be funded either by transferring ownership of an existing
life insurance policy to the trust, or by purchasing a new life insurance policy:
While an existing life insurance policy can be transferred to an irrevocable life
insurance trust, there are "strings attached." If the gift of an existing life insurance
policy is made within three years of the grantor/insured's death, the value of the
life insurance proceeds are brought back into the estate for federal estate tax
purposes.
Transfer of
existing
policy:
Assuming the grantor is insurable, it may be preferable to make cash gifts to the
trust, which then purchases a new insurance policy on the grantor's life. Since the
grantor/insured never held any "incidents of ownership" in the new policy, the
insurance proceeds should not be included in the taxable estate, even if death
occurs within three years of the insurance purchase by the trust.
Purchase
of new
policy :
In situations where the trust will need to make premium payments, a typical irrevocable life
insurance trust arrangement calls for the grantor/insured to make annual gifts to the trust, which
are then used to pay the life insurance premiums.
continued on next slide
6. How Is an Irrevocable Life Insurance Trust Funded?
6Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
In order for those gifts to qualify for the annual gift tax exclusion ($14,000 in 2013), the gifts must
qualify as a “present interest gift”. This can be accomplished by including a "Crummey" withdrawal
power in the trust.
A Crummey withdrawal power (the name derives from a court case, Crummey v. Comm.) gives the
trust beneficiary a noncumulative, annual right to demand withdrawal from the trust.
Since the beneficiary stands to ultimately benefit from the trust and since a demand withdrawal
from the trust may affect the grantor's decision as to future gifts to the trust, beneficiaries
generally understand that making a demand withdrawal is not in their best interest.
For the demand right to be legitimate, the trustee must provide the beneficiary with notice of
annual trust contributions and provide an adequate amount of time, such as 30 days, for the
demand right to be exercised.
If the demand right is exercised, the trustee must deliver the funds to the beneficiary.
If the demand right is not exercised, the annual gift is then available for the trustee to use
for premium payment purposes.
7. An Irrevocable Life Insurance Trust in Action
7Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
The grantor makes an annual gift to the
irrevocable life insurance trust sufficient to pay
the premiums on the life insurance policy
owned by the trust.
Grantor Trustee
Annual Gifts
PremiumPayments
Trust
Beneficiary(ies)
Crummey Withdrawal Notice
The trustee provides a notice to the trust beneficiary(ies)
of the annual trust contributions subject to withdrawal,
qualifying the gift for the annual gift tax exclusion.
Assuming the trust
beneficiary(ies) do not
exercise their
withdrawal right, the
trustee then uses the
gift to pay the life
insurance premiums.
DeathBenefit
When the grantor/insured dies, the life
insurance death benefit passes income and
estate tax free to the trust.
Insurance Company
Asset Distribution
Grantor’s Estate
LoansorAsset
PurchasesforEstate
Liquidity
Finally, the trust assets are
distributed to the trust
beneficiary(ies) according to
the terms of the trust
document.
If needed for estate liquidity purposes, the trustee
can loan money to the estate or purchase assets
from the estate.
8. Irrevocable Life Insurance Trust Tax Considerations
8Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
If an existing life insurance policy is given to the trust, the value of the policy is subject to gift
tax, but only if it exceeds the annual gift tax exclusion. The value of the policy is generally
based on the policy's interpolated terminal reserve value, a value that is usually close to the
cash surrender value.
If death occurs within three years of giving an existing life insurance policy to the trust, the
value of the death proceeds will be brought back into the estate for federal estate tax
purposes.
Annual gifts made to the trust for premium payment purposes must be subject to the
Crummey withdrawal powers in order to qualify for the annual gift tax exclusion ($14,000 in
2013). Alternatively, gifts will be subject to the unified federal gift and estate tax, but qualify
for the lifetime exemption equivalent ($5,250,000 in 2013).
The death benefit payable to the trust will not be included in the insured's taxable estate,
assuming the insured held no incidents of ownership in the policy at death.
Death benefits are generally received free of federal income tax.
9. Uses of an Irrevocable Life Insurance Trust
9Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
If your estate is likely to face a federal estate tax liability, an irrevocable life insurance trust can
replace funds used to pay the estate tax, without the death proceeds also being subject to the
estate tax.
An irrevocable life insurance trust can be put to a variety of uses:
continued on next slide
If your heirs are likely to need additional estate liquidity after your death, such as to continue a
family business, an irrevocable life insurance trust can provide that liquidity, again without the
insurance proceeds being subject to the federal estate tax.
If you want to control how death proceeds are distributed, you can do so through the provisions
included in an irrevocable life insurance trust.
If you have children from a prior marriage, but want your current spouse to be the primary
beneficiary of your estate, naming your children the beneficiaries of an irrevocable life insurance
trust can provide them with a distribution at your death, rather than at your surviving spouse's later
death.
If you want to leave your loved ones a substantial life insurance estate, an irrevocable life insurance
trust can be used to pass the full value of life insurance proceeds to your heirs estate tax free.
10. Uses of an Irrevocable Life Insurance Trust
10Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
If you want to make a substantial bequest to a charity, either during your lifetime or at your death,
an irrevocable life insurance trust can play a wealth replacement role, with the proceeds from the
trust replacing for your heirs the value of assets given to charity.
If you are considering use of an irrevocable life insurance trust, however, it is important that you also
evaluate the potential drawbacks of this arrangement:
Since the trust is irrevocable, you relinquish control of the life insurance policy and annual gifts
made to the trust. In addition, once the trust document is executed, you cannot change the terms
or terminate the trust.
If the trust contains the Crummey withdrawal provision in order to qualify the gifts to the trust for
the annual gift tax exclusion, a beneficiary may exercise his or her right to demand a withdrawal.
There is some expense involved. In addition to possible trustee fees, you should consult with an
attorney experienced in estate planning in order to avoid unforeseen tax and distribution
consequences.
11. Irrevocable Life Insurance Trust Action Checklist
11Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
(Grantor and Attorney)
Draft and execute a trust agreement; name a trustee.
(Grantor, Trustee and Financial Professional)
Transfer existing life insurance policy to the trust or apply for a new life insurance policy,
naming the trustee as policy owner and beneficiary.
(Grantor)
Make cash gifts to the trust.
(Trustee)
If applicable, send Crummey withdrawal notices to beneficiary(ies).
(Trustee)
Pay the life insurance premiums.
(Trustee)
Upon the grantor’s death, manage the insurance proceeds and make distributions according
to the terms of the trust.
12. A Note About Naming a Trustee
12Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
The spouse can be named as trustee, but the attorney may have to include special provisions in
the trust agreement in order to avoid adverse tax consequences. If, however, second-to-die life
insurance is used in the trust, the spouse should not be named as trustee.
Finally, it is generally recommended that the trustee of an irrevocable life insurance trust not be
the same as the estate's personal representative (executor). Reason: Conflicts between the trust
and the estate may arise after the grantor's death.
While an individual or a corporation, such as a bank
or trust company, can be named to serve as trustee
of an irrevocable life insurance trust, the insured
must not be the trustee.
Naming the insured as trustee will
cause the life insurance proceeds
to be included in the insured's
taxable estate!
13. A Note About The Federal Estate Tax
13Protecting Life Insurance Proceeds: An Irrevocable Life Insurance Trust Review
Whether your estate is actually subject to the federal estate tax will depend on the size of your
estate, the year you die and whether future Congressional action modifies the estate tax rules.