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Irrevocable Life Insurance Trusts
Friday, May 13, 2011 Recent Press Coverage of Estate Planning (May 13, 2011)
Hani Sarji of Forbes reviews a book by author and columnist Deborah Jacobs on estate planning, with particular attention paid to why estate planning is important for women. The book covers basic documents everyone should have, naming a guardian for young children, and planning for education expenses, among many others. See Estate Planning Smarts for New Moms (May 8, 2011).
Lewis Saret of Forbes discusses the importance of making Irrevocable Life Insurance Trusts (ILIT) flexible to account for possible increases in the federal estate tax applicable exclusion amount, or possible repeal of the federal estate tax. See The Necessity of Flexibility: ILITs and Estate Tax Uncertainty (May 6, 2011). Friday, April 22, 2011 Recent Press Coverage of Estate Planning (April 22, 2011)
Kelly Greene of the Wall Street Journal reports that with estate tax laws in flux, your estate plan needs to cover many contingencies, and may need updating. She suggests that the way many estate plans are currently worded could cause them to backfire, either by triggering unnecessary state estate taxes or by accidentally disinheriting a surviving spouse. See Does Your Trust Need a Tune-Up? (Apr. 16, 2011).
Bill Bischoff of SmartMoney reviews the basics of Irrevocable Life Insurance Trusts (ILIT), including how you can avoid estate taxes on your life insurance policies if they are correctly owned by an ILIT, and discusses whether you should consider long term disability insurance, and some tax implications related to those policies. See How to Avoid Taxes on Life Insurance (Apr. 20, 2011). Tuesday, January 25, 2011 NEET Tips
NEET Tips answers questions posed online to the NEET website
What are Crummey Powers?
Crummey powers are often used in conjunction with Irrevocable Life Insurance Trusts (ILIT) to make a gift to a trust qualify for the gift tax annual exclusion. In order for a gift to qualify for the gift tax annual exclusion, it must be a gift of a present interest. In the context of ILITs, the Grantor makes a gift to the trust, which the trust beneficiary has the power to withdraw. If the beneficiary does not exercise the power to remove the contribution within a stated time period, often 30 days, the power lapses and the contribution can be used to pay a life insurance premium or for other purposes. It’s important that there not be a written understanding or other agreement between the Grantor and the beneficiary that the beneficiary will not remove the Grantor’s gift to the trust, because then the IRS will find that the Grantor’s contribution was not a present interest gift.
For more information on ILITs, see the articles:
Doubling Life Insurance Proceeds with an ILIT
Uses of Life Insurance in Estate Planning Friday, May 21, 2010 Press Coverage of Estate Planning this Week (May 21, 2010)
Michaela Cavallaro of Dow Jones Newswires recounts how a financial planner’s rearranging a client’s assets shortly before his death led to a significantly larger inheritance for his children. Estate planning vehicles, including an irrevocable life insurance trust (ILIT), are reported to have quadrupled the amount of money, after taxes, his four daughters would receive. See Digging Deeper to Create a Healthy Inheritance (May 19, 2010).
William Forsyth Jr., a senior fiduciary counsel at Bessemer Trust, shares five rules of thumb for legacy planning, including making children wait until at least age 28 to receive a large inheritance, distributing unequal gifts to children during life, but not after death, and making gifts during your lifetime, even if they are taxable. See William Forsyth Jr., On Rules for Legacy Planning (May 14, 2010).
John R. Sloan writes in Local Tech Wire about the basic rules and tools of asset protection. Many asset protection methods are relatively simple and effective, and include retitling assets in your spouse’s name, placing money in accounts protected by state and federal laws, and setting up business entities to segregate asset ownership. See Asset Protection Planning: Shoot Before the Buzzer (May 12, 2010). Friday, September 18, 2009 Press Coverage of Estate Planning This Week (September 18, 2009)Jon Tevlin of the Star Tribune (Minneapolis, Minn.) recounts a cautionary tale of misapplied trust in naming an agent on a power of attorney for finances to manage funds for an adult with autism. When naming a power of attorney for finances, choose someone whose trustworthiness is beyond doubt. See What Happened to a Vulnerable Man’s Money? (Sept. 12, 2009).
Nolan Baker and Mark Clair write in the Toledo Free Press on the importance of planning when you have a blended family. If you are not careful, your children could be left with no inheritance. See If You Re-Marry, Make Sure to Protect Your Children (Sept. 18, 2009).
Charles Ross of the St. Louis American lists several problems with the probate process that many people would prefer to avoid, including delays in receiving an inheritance, costs of going through probate, and the lack of family privacy. See What Are the Pitfalls of Probate? (Sept. 18, 2009).
James P. O’Malley writes in The Ledger (Lakeland, Fla.) about how too many family businesses fail after the first generation, and how to prevent that from happening to you. His advice includes writing a buy-sell agreement, gifting the family business to the next generation to reduce estate taxes, and most importantly, starting the planning process now instead of putting it off. See Working on Your Estate Plan Now Will Pay Off Later (Sept. 14, 2009).
Michaela Cavallaro of Dow Jones Newswires recounts how an Irrevocable Life Insurance Trust paired with creative funding mechanisms to pay for a new insurance policy allowed an elderly widow to save her beneficiaries a big chunk of her estate from estate taxes. See A Sophisticated Solution to a Tax Issue (Sept. 15, 2009). | |
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Welcome to NorthEast Estates and Trusts, PLLC (NEET). NEET assists clients with Estate Planning, Probate and Estate Administration, Special Needs Planning and Advanced Estate Planning matters in Shelburne, Vermont as well as Charlotte, South Burlington, Burlington), Hinesburg, Essex, Essex Junction, Colchester, Winooski , Cambridge, Huntington, Richmond, Williston, Jericho , Underhill , Underhill Center and Fairfax. NEET also serves clients in Chittenden County, Addison County, Washington County, Lamoille County, Franklin County and Grand Isle County.
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