Advantages Of An Irrevocable Life Insurance Trust | Monroe Township - Middlesex County
Website Home Contact Us Blog Archives Blog Home

Interesting Image
 
 
 

Would you like more information on:

 
 
 
Schedule a Phone Call
to discuss your planning needs!
Click to Schedule an Appointment







Website Home


Topics



Archives


Contact Information

Forsgate Commons
241 Forsgate Drive
Monroe, NJ 08831
PH: (732)521-WILL (9455)
FX: (732)521-1204
Info@LawEsq.net
www.LawEsq.net






Advantages Of An Irrevocable Life Insurance Trust

May 8, 2013

Filed under: Estate Planning,Estate Taxes,Inheritance,Irrevocable Life Insurance Trusts,Life Insurance,Trusts — admin @ 6:02 pm

Many Americans may be unaware of what an irrevocable life insurance trust (“ILIT”) is, let alone the benefits it may provide to them. A recent article discusses several of the benefits offered by ILITs.

Typically, life insurance policy proceeds are not subject to income taxation. However, they are included in the calculation of a person’s gross taxable estate. This is where the ILIT comes in. If a person puts their life insurance policy into an ILIT, the proceeds of the policy are kept out of his or her taxable estate. The proceeds will therefore be available to his or her heirs free of income and estate tax.

Additionally, ILITs are a great way to provide cash to help pay for the taxes that will be levied on your estate. Beneficiaries of your ILIT can use some of the proceeds to pay the taxes owed on your estate. By doing this, your actual estate is kept in tact. This strategy is especially beneficial to those whose estate consists largely of illiquid assets such as a business or real estate. Through setting up an ILIT, you can ensure that your family will not have to sell the illiquid assets in your estate in order to satisfy the estate taxes.

Leave a Reply