Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, September 29, 2016

How an ILIT Can Help Preserve Your Assets

ILITAn irrevocable life insurance trust (ILIT) can help provide liquidity to pay estate taxes, safeguarding your assets for your family. When you set up an ILIT, the trust is a holding vehicle for life insurance that removes the policy death proceeds from your estate when you pass. These trust held assets are immune from probate and estate taxes, making them a valuable estate-planning tool. There are some important considerations to keep in mind when deciding to create an ILIT. 

First, you must clearly define your wishes as to how the trust assets will be distributed at death. Next, it is important to remember that the trust increases your liquidity without having to add other assets, like stocks and investment property, allowing you to maintain control over those assets while the ILIT builds value. Finally, you should put forth diligent consideration on who will be the trustee for your ILIT because they must have the willingness and ability to carry out the terms you set forth. 

See 3 Considerations for an Irrevocable Life Insurance Trust, Forbes, September 19, 2016. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

 

https://lawprofessors.typepad.com/trusts_estates_prof/2016/09/how-an-ilit-can-help-preserve-your-assets.html

Estate Administration, Estate Planning - Generally, Estate Tax, Non-Probate Assets, Trusts | Permalink

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