The purpose of an irrevocable life insurance trust (sometimes called an ILIT) is to provide a source of tax free funds in the form of insurance proceeds at the death of the trust grantor. These funds can be used to operate the family business, support a disabled spouse or child, or save a valuable or special asset, such as a vacation home or asset that otherwise might have to be sold to pay estate tax. These trusts must be carefully crafted and administered in order to qualify for estate and gift tax exemptions. For example, the estate tax exemption is available only if the transfer of the life insurance policy to the trust is made more than three years before the transferor’s death or if the trustee applies for and purchases the policy.

Insurance trusts are used in conjunction with a broad range of simple and advanced estate planning techniques. Please call us if you are interested in these or other advanced estate planning strategies.

For assistance, contact attorneys Steven J. Schwartz, Timothy P. Mulhern, Ann I. Weber, Carol Cioe Klyman, Michele J. Feinstein, Gary S. Fentin or David K. Webber.