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How to Design an ILIT?

How to Design an ILIT?

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How to Design an ILIT?

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  1. How to Design an ILIT? Estate planning can be complexed, even for a quite small estate. If you are privileged enough to have a big estate, estate planning becomes even more difficult, yet takes on a heightened importance as well. Along with deciding who will receive your assets upon death, you must take into consideration things such as avoidance of estate taxes and limiting the assets that will be part of the probate process. One estate planning tool that often accomplishes numerous goals is the irrevocable life insurance trust, or ILIT. Designing an ILIT is carried out in much the same way as any other trust. One thing to keep in mind when thinking about the use of an ILIT is that, as suggested by the name, an ILIT cannot be revoked, modified or amended once it has been made. Because of the irrevocable nature of an ILIT, deciding on recipients and funding amounts are significantly important. An ILIT, like all trusts, needs a trustee. The trustee will be responsible for buying and keeping the life insurance policy that is at the center of an ILIT. The trustee will also be responsible for paying out the earnings of the policy upon your passing. Once you have figured out on a trustee, you will carry out the necessary trust documents designed by your estate planning attorney. The trust documents will point out who the recipients are and include specifics regarding the life insurance policy to be bought by the trust. A gift is then made, by you, to the trust in order to purchase the life insurance policy. Each year after that, you will require to make additional gifts to the trust in sums that give enough backing to cover the administration of the trust and premiums due on the policy. When you die, the policy earnings are then paid out to the beneficiaries pursuant to the terms of the trust and policy. The earnings avoid both estate taxation and probate because neither the policy or the earnings were ever legally owned by you. This can save you a considerable amount of money as well as give assets to your loved ones much sooner since the earnings are not held up during the often long probate process. Speak with numerous qualified lawyers about estate planning and tax consequences. You can list of suggested prospects, assess the strengths and weak points of each lawyer. Compare the experience, education, track record and expenses of every one. Keep in mind that it may be that the priciest or skilled legal representative is not fit to your specific needs. Finally, select an estate planning attorney amongst your candidates and start dealing with him in your estate planning. Get Estate Planning Help Now – Contact: Escondido Probate Law 320 E 2nd Ave #217, Escondido, CA 92025 760-979-8096