MT. DIABLO TRUST

Serving Northern California Since 1994

 

What is an

ILIT Life Insurance

Trust?

Like with most Trusts, the ILIT is just a holding device. The ILIT owns your life insurance policy and removes it from your Estate. The ILIT can provide significant tax advantages for you, your loved ones and your Estate. The ILIT provides a legal option to reduce your tax liabilities while maintaining control of your Life Insurance Asset. The ILIT also works well with gifting as it takes advantage of the tax break allowed for gifts called “annual gift tax exclusion.”

 

A Life Insurance Trust is an irrevocable, non-amendable Trust. The ILIT is both the owner and beneficiary of the life insurance policy or policies. Upon the death of the insured, the Trustee invests the insurance proceeds and administers the Trust for one or more beneficiaries. The ILIT will provide financial support for your family and heirs including those with special needs.

 

The ILIT is irrevocable as stated. This means once you've created it and placed an insurance policy or policies inside it, you can't take the policy or policies back into your own name. You can however control and dictate who your initial beneficiaries will be and outline the terms under which the beneficiaries will receive those benefits.  The ILIT also allows you to determine who the Trustee (or Trustees) will be to manage your Trust.

 

The ILIT is a powerful tool that should be considered in your financial management plans.  It will reduce the size of your Estate to minimize your tax liability while allowing you to direct the distribution of the Trust assets to the Trust beneficiaries according to your wishes.

 

Consult your Tax Professional and/or Financial Planner to see if this is applicable in your situation.

 

 

 

 

 

It’s Just A Matter Of Time

916-671-4300

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