If you’re planning your estate, you may wonder whether an Irrevocable Life Insurance Trust, also called an ILIT, could benefit your family after you pass away. Robinson & Henry Probate Attorney Tristan Younghaus explains what an irrevocable life insurance trust is and who may benefit from one.
Let’s Talk About an Irrevocable Life Insurance Trust
There are many kinds of trusts designed to accomplish different goals. Find out which one is right for your unique circumstances. Set up a free meeting with a member of our Estate Planning Team when you call 303-688-0944 or click here to schedule the appointment online.
How an Irrevocable Life Insurance Trust Could Benefit Me
Worried About Estate Taxes
The reason many people create an irrevocable life insurance trust is that they’re concerned about the estate tax. The estate tax threshold is high right now. In 2021, the estate tax does not affect a single person until their estate exceeds $11.7 million. Couples can combine their estate tax exemption amount. So that’s over $20 million for couples. However, as it does from time to time, the estate tax will go back down at some point.
One strategy to remove some assets from your estate is through an irrevocable life insurance trust (ILIT). The way you go about that is to get a life insurance policy and create an irrevocable life insurance trust for that policy. Then, you name a trustee – someone other than yourself – for the ILIT. Taking these steps will effectively remove from your estate whatever you place in that ILIT, and it would not count toward your estate taxes.
Have Questions About Your Estate?
If you have questions about creating an ILIT or an estate plan, our Estate Planning Team can answer your questions. Schedule a free meeting when you call 303-688-0944 or click here to set the appointment online.