Advanced tax planning

Keep life insurance out of your taxable estate.

Life insurance you own is counted in your estate, even though your family receives it income-tax free. For a larger estate, that can mean up to 40 percent of the payout lost to estate tax. An irrevocable life insurance trust owns the policy instead, so the proceeds pass to your family outside your estate.

Call (844) 544-PLAN to schedule

The short answer

An ILIT is a trust that owns and is the beneficiary of your life insurance. Because you do not own the policy, the proceeds are not counted in your taxable estate.

Do this first

✓List your policies, owners, and beneficiaries

✓Note whether each is term or permanent coverage

✓Tell us about any new policy before you buy it

Why it matters

What it does, compared with doing nothing

Policy owned by you

Without a plan

The death benefit is added to your taxable estate.

With the Irrevocable Life Insurance Trust (ILIT)

The trust owns the policy, and the benefit is outside your estate.

Proceeds paid outright

Without a plan

Money goes to beneficiaries with no protection from creditors or divorce.

With the Irrevocable Life Insurance Trust (ILIT)

The trust holds and manages the proceeds under your rules.

Paying estate tax

Without a plan

Heirs may have to sell property or a business to pay the tax.

With the Irrevocable Life Insurance Trust (ILIT)

Trust proceeds can provide cash to the estate to pay tax.

How it works

How it works, step by step

The trust is created

An irrevocable trust is signed with a trustee you choose.

The policy goes into the trust

The trust buys a new policy, or an existing policy is transferred to it.

Premiums are paid by gift

You give the trust money each year to pay the premium, often within the annual gift exclusion.

Beneficiaries are notified

Beneficiaries receive notice of their right to withdraw each gift, which qualifies it for the annual exclusion.

At death

The trust collects the proceeds outside your estate.

Distribution

The trustee pays your family or holds the money in trust as you directed.

Custom plans, flat fees

Advanced planning without the hourly bill.

Every advanced tax plan is custom, built around your assets, your family, and your goals, so the investment is quoted separately after we review your estate.

01Some firms bill tens of thousands, even hundreds of thousands, of dollars in hourly fees for this kind of work.

02We do these plans for a flat rate, quoted in writing before any work begins.

03No meter running on phone calls, emails, or revisions. You know the number up front.

Questions

Common questions

Every family is different. A 15-minute call with a licensed attorney answers the rest.

Estate tax planningBack to: A Larger Estate→

What if I transfer a policy I already own?

If you die within three years of the transfer, the proceeds can still be counted in your estate. When possible, the trust buys a new policy.

Can I change the trust later?

It is irrevocable, so it cannot simply be changed. We build in flexibility, such as a trust protector, when the trust is written.

Who should be trustee?

Someone other than you, often an adult child, a trusted friend, or a professional.

Is this only for very large estates?

It is most useful when insurance could push your estate over the exemption, or when you want the proceeds protected.

Ask whether Irrevocable Life Insurance Trust fits your family.

In 15 minutes, a licensed attorney will tell you what your family needs and quote the flat fee in writing.

Call to schedule