How Would an Irrevocable Life Insurance Trust Benefit You?

For every Life Insurance policy, there is an owner (which is usually the insured) and a beneficiary. At death, the proceeds are included in the owner’s estate for Estate Tax consideration. If proceeds pass to the spouse, they could become estate taxable in the spouse’s estate. The Life Insurance Trust is irrevocable and non-amendable, and thus is an entity unto itself. There are several benefits to an Irrevocable Life Insurance Trust: the trustee of the trust can control the distributions from the trust. And it provides added liquidity without having to liquidate assets for the survivor. When transferring a policy into an Irrevocable Life Insurance Trust, the insured must survive for three years. If not the policy value will be included in the estate. Most Irrevocable Life Insurance Trusts are funded by annual gifts for gift tax purposes. The Irrevocable Life Insurance Trust can purchase assets from the estate or loan money to the estate. Complex tax rules apply so professional financial help will be needed. Call us today to learn more about how an Irrevocable Life Insurance Trust can benefit you.

Kevin Roberts

P: 502-373-1030
College planning, investment management, estate planning
Louiseville, KY