Did you know that the proceeds from your life insurance policy are included in your estate? You can use an irrevocable insurance trust (ILIT) to own your policy and still leave the proceeds to your family without having the funds included in your estate. There are some rules you need to follow in order to make this happen. For example, the trust must own the policy and pay the policy premiums. You cannot act as trustee, but you can leave instructions to the trustee on how to distribute the policy proceeds. You can name the trust beneficiaries, and can, for the most part, dictate the how the trustee will use the life insurances funds. There are many other rules and requirements so if you would like to look into using an ILIT for your life insurance policy, it is best to work with an experienced attorney. Once the trust is prepared, you cannot change it so it is best to make sure it is well-drafted.
Life Insurance
