Category Archives: Life Insurance Trusts

Life Insurance Trusts

Posted on March 26, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Life insurance trusts have long assumed a position of importance in estate planning, especially for larger estates, since insurance proceeds may be excluded from the settlor’s gross estate, thereby reducing or eliminating estate taxes. These tax savings may be achieved if the trust is drafted to authorize (but not require) the trustee to purchase assets from, or loan money to, the estate. Continue reading →

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Life Insurance Trusts Mitigate Estate Tax Uncertainties

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

To view printer-friendly Memorandum, press here: Life Insurance Trusts Mitigate Estate Tax Uncertainties.wpd Irrevocable life insurance trusts (ILITs) enjoy vastly preferential status under the income and transfer tax laws. Properly structured, proceeds are not included in the insured’s gross estate. … Continue reading →

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Life Insurance Trusts

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Life insurance can be an invaluable estate planning tool. It can provide a broad measure of financial security for loved ones as well as provide the liquidity necessary to meet tax and other estate settlement obligations. Ownership of a life … Continue reading →

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Life Insurance Trusts

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Life insurance can be an invaluable estate planning tool. It can provide a broad measure of financial security for loved ones as well as provide the liquidity necessary to meet tax and other estate settlement obligations. Ownership of a life … Continue reading →

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Avoiding Inclusion of Life Insurance Proceeds in Estate

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

IRC Sec. 2042 provides that all policies of insurance received by or “for the benefit of” the estate are included in the decedent’s gross estate. Proceeds paid to beneficiaries are also includible if the decedent assigned the policy but possessed … Continue reading →

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Irrevocable Life Insurance Trusts (ILITs)

Posted on March 15, 2010 by David L. Silverman, J.D., LL.M. (Taxation)

Life insurance proceeds are excludible from beneficiaries’ income under §101, provided the policy had not been transferred for valuable consideration. Proceeds from policies transferred in trust will also be excluded from the insured’s gross estate provided the insured (i) retained … Continue reading →

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