An Irrevocable Life Insurance Trust, commonly called an ILIT, is a planning tool used to remove life insurance proceeds from a taxable estate and to direct how policy benefits are managed and distributed after death. At the Law Offices of Robert P. Bergman, our San Jose practice helps families in San Lorenzo and throughout Alameda County understand how an ILIT can preserve wealth for beneficiaries, reduce estate administration burdens, and provide liquidity to cover taxes, debts, or business transition costs. This introduction explains the primary purpose of an ILIT and how it operates alongside other estate planning instruments such as wills, revocable living trusts, and powers of attorney.
Setting up an ILIT involves several deliberate steps, including selecting a trustee, transferring ownership or purchasing a life insurance policy through the trust, and structuring contributions to avoid unintended tax consequences. A well-drafted ILIT will address funding mechanics, beneficiary designations, and distribution rules while anticipating life changes such as marriage, divorce, or the birth of grandchildren. Many clients seek an ILIT to ensure insurance proceeds are available for intended uses and protected from estate taxes and certain creditor claims. This paragraph outlines why careful drafting and ongoing administration are important for achieving your long-term goals.
An ILIT offers benefits that can be central to a comprehensive estate plan, beginning with removing insurance proceeds from the grantor’s estate for estate tax purposes and providing controlled distributions to beneficiaries. The trust structure can protect proceeds from potential future creditors or claims against a beneficiary, allow for staged distributions based on age or milestones, and supply immediate liquidity to settle taxes or debts without forcing the sale of family assets. For business owners and individuals with significant assets, an ILIT can help maintain family harmony by ensuring insurance proceeds are used as intended and managed by a trustee according to clear trust terms.
The Law Offices of Robert P. Bergman in San Jose serve clients throughout Alameda County, including San Lorenzo, with a focus on practical, client-centered estate planning and trust administration. Our attorneys draft documents such as revocable living trusts, wills, financial powers of attorney, advance health care directives, and specialized instruments like ILITs and irrevocable life insurance trusts. We emphasize clear communication, tailored solutions for family and business situations, and hands-on guidance through funding and administration. Our goal is to design plans that reflect each client’s values and priorities while anticipating tax considerations and long-term management needs.
An ILIT is a distinct legal entity created to own a life insurance policy or the proceeds from a policy on the grantor’s life. Because the trust is irrevocable, the assets placed into it are not treated as part of the grantor’s gross estate for federal estate tax purposes if properly structured. This requires precise timing and adherence to tax rules, including the use of gift tax exclusion mechanisms when transferring policy ownership or funding premiums. The trustee, who must be independent of the insured in many circumstances, manages the policy and disburses proceeds according to the trust terms, which can include protecting funds for minor children or funding family legacy plans.
Clients considering an ILIT must understand both the benefits and the limitations of an irrevocable arrangement. Once established, the grantor typically cannot change the trust terms or reclaim trust assets without triggering tax or other consequences. The trust is also subject to rules governing Crummey withdrawals and gift tax reporting if annual gift tax exclusions are used to fund premium payments. Proper drafting addresses administration responsibilities, successor trustees, distribution contingencies, and coordination with beneficiary designations on retirement accounts or payable-on-death accounts to avoid conflicts or unintended taxable inclusions.
An Irrevocable Life Insurance Trust is a legal arrangement in which the grantor transfers ownership of a life insurance policy to a trust that cannot be revoked. The trustee holds the policy or receives proceeds when the insured dies and manages distributions according to the trust instrument. The structure separates the policy proceeds from the insured’s estate in many cases, helping to minimize estate tax exposure. Effective ILIT drafting explains funding methods—sometimes involving premiums paid from annual gift exclusions—trustee powers, beneficiary rights, and the procedures for paying premiums or replacing policies while maintaining the intended tax benefits and protective features.
Key elements of an ILIT include the trust document specifying trustee powers and beneficiary designations, the method for funding premiums or purchasing the policy, and rules for distributions. Administrative processes involve transferring existing policies into the trust or having the trust purchase a new policy, coordinating premium funding through gifts to the trust, and maintaining records and gift tax reporting. Trustee duties can include investing trust funds, paying premiums, monitoring policy performance, and ensuring trust terms are followed. Regular reviews help to keep the trust aligned with changing family circumstances, tax law updates, and evolving financial goals.
This section defines common terms used in ILIT planning and administration so that clients understand the technical language found in trust documents and related tax guidance. Definitions cover topics such as grantor, trustee, beneficiary, Crummey notice, taxable estate, gift tax exclusion, and trustee powers. Knowing these terms helps you make informed decisions about trustee selection, funding strategies, and coordination with other elements of your estate plan. Clear glossary definitions reduce confusion and support better communication with your legal and financial advisors throughout the life of the trust.
The grantor is the person who creates the ILIT and transfers ownership or contributions into the trust. In ILIT contexts, the grantor often funds premium payments for a life insurance policy indirectly by making gifts to the trust. These gifts may qualify for annual gift tax exclusions if the trust provides beneficiaries with a temporary withdrawal right, commonly known as a Crummey power. The grantor’s actions and intentions when forming the trust affect whether insurance proceeds are excluded from the estate, so careful timing and documentation are essential to achieve the desired tax and asset protection outcomes.
The trustee is the individual or entity appointed to manage the ILIT, hold the policy, and distribute proceeds according to the trust terms. The trustee’s responsibilities typically include paying premiums, maintaining trust records, providing notices to beneficiaries for withdrawal rights if applicable, and administering distributions. In many ILITs, the trustee should be someone other than the insured to avoid estate inclusion, though family members can sometimes serve in that role under proper structuring. Selecting a trustee involves balancing fiduciary reliability, administrative capability, and the potential for conflicts of interest over time.
A Crummey power is a trust provision that grants beneficiaries a limited, time-limited right to withdraw gifts made to the ILIT, enabling those gifts to qualify for the annual gift tax exclusion. The trust document states how long the withdrawal window will be and identifies the beneficiaries who receive notice. Properly implemented Crummey notices and adherence to formalities are important to preserve the exclusion and avoid gift tax consequences. Trustees must follow the notice and record-keeping procedures to demonstrate compliance with tax rules and to protect the intended transfer tax benefits of the ILIT structure.
The taxable estate refers to the value of assets included in a decedent’s gross estate for estate tax calculations. An ILIT, when correctly structured and funded prior to death, can remove life insurance proceeds from the taxable estate, potentially reducing estate taxes. However, improper transfers or retention of certain powers by the grantor can cause inclusion of the policy proceeds back into the estate. Careful drafting and administration ensure that the trust’s terms and funding mechanics align with federal and state rules to secure the anticipated reduction in estate tax exposure.
When deciding whether an ILIT is right for your family, it helps to compare it to alternatives such as naming beneficiaries directly on a life insurance policy, using a revocable living trust, or relying on payable-on-death designations. Each approach has trade-offs in terms of control, tax consequences, ease of administration, and protection from creditors. An ILIT provides control over distributions and often better estate tax outcomes, while direct beneficiary designations are simpler but may expose proceeds to probate or creditor claims. Discussing the family’s objectives, asset mix, and concerns helps identify the approach that best fits your circumstances.
A limited approach such as naming beneficiaries directly or using a revocable trust may be sufficient when an estate’s size is modest, there are no significant estate tax concerns, and the beneficiaries are capable and trustworthy. In those cases, the simplicity of direct beneficiary designations allows for quick distribution of proceeds without the additional complexity of trust administration. Families who prioritize speed and minimal expense over long-term control or creditor protection often choose these simpler arrangements, which can be appropriate provided that beneficiary designations are regularly reviewed and coordinated with other estate planning documents.
When there is low concern about creditors, divorce, or estate taxes, a straightforward beneficiary designation or revocable trust may meet a family’s objectives without the need for an ILIT. This approach reduces ongoing administrative duties and avoids irrevocable transfers that cannot be easily reversed. It is also appropriate for individuals whose primary goal is to ensure funds pass directly to specific loved ones without layered trust structures. However, it is important to evaluate potential future risks because circumstances can change, and a plan that is adequate today might not remain so over time.
A comprehensive ILIT and estate plan becomes advisable when an individual’s asset base may trigger estate taxes or when protection from future creditor claims is a priority. For families with business interests, significant life insurance holdings, or complex beneficiary situations, an ILIT can provide targeted solutions that preserve wealth and fund necessary liquidity at death. Coordinating the ILIT with retirement accounts, revocable trusts, and other estate documents ensures the overall plan works together, avoiding unintended inclusions in the estate or conflicting beneficiary designations that could undermine the client’s objectives.
When beneficiaries include minors, individuals with special needs, or those who might face creditor or divorce risks, a comprehensive ILIT can define safe distribution mechanisms, staggered payouts, and trustee discretion to administer funds in a way that safeguards long-term interests. The trust can include provisions for education, health, or support while preventing outright distributions that could be lost or misused. This level of planning requires careful drafting to balance protection with flexibility and to ensure compliance with relevant tax and public benefits rules where applicable.
A comprehensive ILIT approach integrates the trust with other estate planning tools to maximize intended outcomes, such as reducing estate taxes, providing creditor protection, and ensuring that life insurance proceeds are available for specific purposes. Well-coordinated planning reduces the risk of conflicting beneficiary designations, unintended taxable inclusions, or gaps in funding. This approach also allows for clearer governance of proceeds through trustee powers, distribution standards, and successor trustee arrangements, which can simplify administration and reduce family disputes during difficult times after a loss.
Comprehensive planning addresses both immediate needs and longer-term legacy goals by aligning life insurance ownership with trust provisions that reflect the grantor’s intentions. The trust can ensure liquidity to pay taxes and settle the estate, support family members through designated distributions, and preserve value for future generations. It also permits contingencies—such as replacement of policies or mechanisms for trust modification through permissible legal processes—so the plan can adapt while maintaining the fundamental protective and tax-related benefits that drew the client to choose an ILIT.
One of the most recognized benefits of an ILIT is its potential to remove life insurance proceeds from the grantor’s estate, which can reduce estate tax exposure and provide immediate cash to settle obligations. This liquidity can be used to pay estate taxes, outstanding debts, or to provide for heirs without having to liquidate business interests or real estate. The trust’s terms can specify how funds are applied, giving families confidence that insurance proceeds will address pressing financial needs during administration and support long-term family plans.
An ILIT allows the grantor to set conditions and timing for distributions, protecting proceeds from potential creditor claims or imprudent spending by beneficiaries. The trustee administers benefits according to the trust instrument, which can include staged payouts, required uses for education or health, and safeguards for beneficiaries with special needs. Such control helps preserve family wealth across generations and reduces conflict by establishing objective rules for distribution. The protective features of a trust structure are a key reason many families choose an ILIT as part of a comprehensive plan.
Begin your ILIT planning by identifying the primary purpose for the trust, whether it is estate tax reduction, providing liquidity, protecting beneficiaries, or preserving business continuity. Clear objectives guide decisions about trustee selection, distribution provisions, and funding methods. Discuss your goals with your legal advisor so that the trust document is drafted to reflect those priorities. Early clarity also helps coordinate beneficiary designations and other estate planning documents, reducing the chance of conflicting instructions that could undermine the intended outcomes of the ILIT.
Selecting the right trustee involves balancing administrative capability, impartiality, and continuity. Trustees will handle premium payments, maintain records, provide notices, and administer distributions, so choose someone or an institution that can fulfill these duties reliably over many years. Consider successor trustee provisions and include flexibility for trustee removal or replacement if circumstances warrant. Clear guidance to the trustee in the trust instrument about investment authority, distribution standards, and required reporting helps ensure that the ILIT functions as intended and aligns with the grantor’s long-term goals.
Consider an ILIT if your life insurance proceeds could significantly increase your taxable estate, if you want to control how proceeds are used after death, or if you need to protect those funds from potential creditor claims or beneficiary mismanagement. An ILIT can be particularly useful for business owners who need liquidity to fund buy-sell arrangements, for parents who want staged distributions for children, or for families seeking to preserve assets for future generations. Evaluating the size of your estate, the nature of your assets, and your family’s needs helps determine whether an ILIT is appropriate.
An ILIT may also be appropriate when planning for blended families, protecting benefits for beneficiaries with special needs, or coordinating insurance with other estate planning documents like revocable trusts and wills. Because the trust is irrevocable, it requires a commitment to the structure and funding approach, so thoughtful consideration and review are advisable before implementation. Regular plan reviews ensure the ILIT continues to meet objectives as life events occur and laws evolve, preserving the value of the arrangement over time.
Typical circumstances that lead families to establish an ILIT include sizable life insurance holdings that would increase estate tax liability, business owners seeking to provide liquidity for continuity, parents who want to protect inheritances for minor children, and situations where beneficiaries may be vulnerable to creditors or spendthrift risks. An ILIT can also be part of a strategy to preserve eligibility for public benefits by keeping proceeds out of the beneficiary’s estate if carefully drafted. Each family’s facts differ, so the decision to use an ILIT depends on a full review of assets, liabilities, and goals.
For individuals with estates that may face federal or state estate taxes, an ILIT can be a purposeful tool to reduce taxable estate value by removing life insurance proceeds from estate inclusion. This is particularly relevant where insurance proceeds are intended to pay taxes or preserve business continuity without forcing asset sales. Establishing an ILIT ahead of time allows for careful funding and ensures the trust conforms to relevant tax rules, helping families implement a predictable plan for transferring wealth to heirs in the most tax-efficient manner possible.
Business owners often use ILITs to hold policies that fund buy-sell agreements or to provide liquidity for estate settlement so that family members are not forced to sell the business. The trust ensures that insurance proceeds are held and distributed according to carefully drafted terms, which can be tailored to support business continuity and fair treatment of heirs. Coordinating the ILIT with business succession documents and corporate agreements helps prevent conflicts and ensures that liquidity needs at death are met without undermining the long-term health of the business.
An ILIT can be structured to protect beneficiaries who may have special needs, are minors, or face creditor risks, by placing distribution controls and trustee discretion into the trust terms. This can include provisions for education, healthcare, or supplemental support while preserving eligibility for public benefits when necessary. Careful coordination with supplemental needs planning and qualified disability arrangements is often required to avoid unintended consequences. The trust can help ensure that life insurance proceeds serve family members’ long-term needs rather than creating immediate financial complications.
The Law Offices of Robert P. Bergman is available to meet with individuals and families in San Lorenzo and throughout Alameda County to discuss ILIT planning and broader estate strategies. We provide consultations to evaluate whether an ILIT fits your situation, review current policies and beneficiary designations, and propose practical steps to implement a trust and fund it properly. Our approach emphasizes clear client communication, careful drafting, and support through administration tasks so that clients feel confident their plans are legally sound and aligned with their family’s needs and values.
Clients work with the Law Offices of Robert P. Bergman because we combine practical legal drafting with a focus on client goals and long-term administration. We address the technical tax and trust issues that accompany ILITs while presenting options in plain language so clients can make informed decisions. Our team works to coordinate the ILIT with other estate documents such as revocable living trusts, wills, powers of attorney, and health care directives to avoid conflicts and ensure coherence across the plan. We also help implement funding strategies and provide guidance on trustee selection and responsibilities.
Our firm assists clients with the crucial steps of transferring policy ownership, preparing Crummey notices when required, and maintaining proper records to support annual gift exclusions and tax reporting. We help clients anticipate future needs by drafting flexible trust terms that include successor trustee provisions and practical guidelines for trust administration. For business owners or those with blended families, we focus on tailoring trust language to address unique distribution goals and potential conflicts, seeking to preserve both asset value and family relationships across generations.
We also support families through the post-death administration phase, assisting trustees with claims, policy proceeds collection, and tax filings so that distributions proceed according to the trust terms. Our services include reviewing existing insurance arrangements, advising on policy replacement or premium funding, and coordinating with accountants and financial advisors when complex tax or investment issues arise. With local roots in San Jose and service to San Lorenzo, our firm provides responsive counsel to help families implement and maintain their ILITs over time.
Our process begins with an in-depth consultation to learn about your family, assets, policy holdings, and goals. We review existing documents, identify potential tax or creditor concerns, and recommend whether an ILIT or another approach best meets your needs. Once the decision is made to proceed, we draft the trust document, assist in transferring or purchasing the insurance policy, and establish funding mechanisms for premium payments. We provide guidance on Crummey notices, trustee responsibilities, and recordkeeping to preserve the intended tax and protective benefits of the trust.
The first step is a comprehensive review of your current estate plan, life insurance policies, beneficiary designations, and financial situation. We identify inconsistencies and recommend actions to align documents and ownership with your goals. This phase includes discussing trustee options, funding strategies for premiums, and potential tax implications. Clear communication about family dynamics and long-term objectives helps shape the trust’s provisions so that the resulting ILIT is practical, enforceable, and tailored to meet the needs of your heirs and any business interests.
During trust drafting, we tailor provisions that address how proceeds will be held and distributed, the trustee’s authorities, successor trustee arrangements, and any special limitations or instructions for beneficiaries. We discuss distribution standards, such as needs-based distributions or staged payouts, and include clear instructions for handling scenarios like beneficiary predecease or termination. The trust language is crafted to avoid unintended estate inclusion and to provide the trustee with clear guidance for administering the trust in alignment with your family’s preferences.
We assist with the mechanics of transferring policy ownership into the ILIT or arranging for the trust to purchase a new policy, and we coordinate beneficiary designations on other accounts to prevent conflicts. If premiums will be funded by gifts to the trust, we prepare appropriate notice procedures and document the gifts for tax reporting. This coordination avoids common mistakes that can accidentally cause inclusion of the policy proceeds in the estate or create confusion among beneficiaries during administration.
Once the trust document is executed, we guide clients through funding steps, which may include transferring existing policies, setting up trust-owned policies, or establishing gifting procedures for premium payments. We produce and implement Crummey notices if annual gift exclusions will be used, and we establish record-keeping protocols to document each contribution. Proper execution and timely notices are important to preserve tax treatment and to demonstrate that funding and administration complied with relevant requirements over time.
Practical tasks at this stage include changing ownership and beneficiary designations with the insurance company or issuing a new policy owned by the trust. We review policy terms, investigate any transfer-for-value issues, and confirm that the carrier recognizes the trust as owner and beneficiary where appropriate. These steps ensure the policy remains in force and that the trust’s rights are properly documented, preventing administrative issues or disputes that could interfere with the intended distribution of proceeds at the insured’s death.
If the funding plan relies on annual gift exclusions, the trustee or grantor must provide timely written notices to beneficiaries explaining withdrawal rights. We prepare standard notices and document each gift and mailing to support exclusion claims. Accurate record-keeping is also essential for future tax filings and for the trustee to evidence compliance with trust formalities. These administrative steps, though sometimes overlooked, can determine whether the ILIT achieves its intended tax and protection objectives.
An ILIT requires periodic review to ensure it continues to match your family’s needs, to verify that premiums are paid and records maintained, and to help the trustee respond to life changes or policy decisions. We provide continuing counsel to trustees regarding distributions, policy replacements, and interactions with other estate plan components. Regular reviews help catch issues early, such as changes in tax law, beneficiary circumstances, or policy performance that could affect the trust’s effectiveness, and allow for appropriate legal steps where modification or clarification is necessary under applicable rules.
After the insured’s death, the trustee must file claims with the insurance carrier, collect proceeds, and administer distributions per the trust terms. We assist trustees with claim procedures, tax filings, and beneficiary communications to ensure the trust is administered correctly and efficiently. Our guidance includes preparing required tax returns, advising on distribution timing, and resolving any disputes or issues that arise during claims and distribution, thereby helping to reduce delay and minimize family tensions during the administration period.
Ongoing compliance involves maintaining accurate records of premium payments, gifts, notices, and trustee actions, which are essential for tax reporting and for substantiating that the ILIT has been properly administered. We help trustees establish practical record-keeping systems and provide periodic compliance checks to confirm that funding and notices occurred as required. This ongoing attention preserves the benefits of the trust and provides a clear administrative trail that can be invaluable in the event of audits or beneficiary challenges.
An Irrevocable Life Insurance Trust is a trust that, once created and funded, owns a life insurance policy or receives policy proceeds at the insured’s death. The trust’s terms spell out how policy benefits will be managed and distributed to beneficiaries. Because the trust is irrevocable, the assets held by the ILIT are generally not included in the grantor’s taxable estate when properly structured, which can result in estate tax savings. The trustee holds legal title to the policy and must administer the trust according to the document’s instructions and relevant law. Setting up an ILIT typically involves drafting the trust, naming a trustee, transferring ownership or having the trust purchase a policy, and establishing funding methods for premiums. If gifts are used to fund premiums, the trust may include withdrawal rights so those gifts qualify for annual exclusions. Proper administration, record-keeping, and timely notices are essential to preserve tax benefits and to ensure the trust functions as intended for beneficiaries.
An ILIT is often used to keep life insurance proceeds out of the grantor’s taxable estate, so that the proceeds are not counted when determining estate taxes. This works when the trust truly becomes the owner of the policy before death and the grantor has given up certain powers over the policy. If the trust is created or funded too close to the time of death, estate inclusion rules may still apply. Careful planning and timing are therefore important to achieve the expected estate tax treatment. Additionally, the ILIT can provide liquidity to pay estate settlement costs without forcing the sale of assets, which can be particularly valuable for illiquid or closely held business interests. By specifying how proceeds are used, the trust helps ensure funds meet specific needs while reducing the overall taxable estate, which can preserve more of your wealth for intended beneficiaries.
A Crummey power is a temporary withdrawal right given to beneficiaries when gifts are made to the ILIT, enabling those gifts to qualify for the annual gift tax exclusion. The trustee must provide written notice to beneficiaries of their withdrawal right for a limited period and maintain documentation of the notice and any actions taken. Implementing Crummey powers correctly helps prevent the gifts used to pay premiums from being treated as taxable transfers. Administratively, Crummey notices require consistent procedures, and trustees should follow the trust’s terms strictly to substantiate exclusion claims. Failure to provide timely notices or to keep accurate records may jeopardize the gift tax treatment, so the mechanics of these powers are an important part of ILIT administration and require careful attention during funding.
Transferring an existing life insurance policy into an ILIT is possible but must be done carefully to avoid tax pitfalls. If a policy is transferred within a certain look-back period before death, proceeds may still be included in the grantor’s estate. Insurance carriers also have transfer procedures and may assess transfer-for-value implications that could affect the tax treatment of proceeds. Reviewing policy terms, carrier rules, and estate timing is necessary before transferring ownership of an existing policy into a trust. When transferring a policy, it is important to confirm that the trust is properly recognized as the owner and that any required consent from the insurer has been obtained. Our firm assists clients with the logistics and documentation for transfers and advises on whether buying a new trust-owned policy or transferring an existing policy best meets the client’s objectives given the timing and tax considerations.
Choosing a trustee involves weighing administrative ability, impartiality, and continuity. Trustees must pay premiums, maintain records, provide notices where required, and administer distributions, so practical administrative skills are important. Many clients select a trusted family member, a professional individual, or a corporate trustee depending on the complexity of the trust and the anticipated duration of administration. Naming successor trustees helps provide continuity if the initial trustee can no longer serve. Whatever your choice, it is helpful to provide clear instructions in the trust document about the trustee’s powers, limitations, and reporting obligations. This guidance reduces ambiguity and assists the trustee in making consistent, legally sound decisions when administering the ILIT for the benefit of the beneficiaries.
Premiums for an ILIT can be funded through gifts from the grantor to the trust, which the trustee then uses to pay the insurance carrier. To use the annual gift tax exclusion, the trust typically grants beneficiaries a short-term withdrawal right under a Crummey provision, with formal notice and documentation each year. Alternatively, the trust can hold liquid assets from which premiums are paid, or the trust can be structured to receive other types of contributions suitable for funding the policy over time. Maintaining consistent funding is important to keep the policy in force. If premiums lapse, the trust may have to replace the policy or use other assets to maintain coverage. We assist clients with establishing sustainable funding plans, preparing notices, and coordinating with financial advisors to ensure premiums are handled reliably and in compliance with tax rules.
An ILIT can provide protection from certain creditors and divorce claims by placing proceeds into a trust with distribution controls and spendthrift provisions. When beneficiaries do not have direct ownership of the proceeds, funds held by the trust may be shielded from claims against beneficiaries in many circumstances. The level of protection depends on the trust language, applicable state law, and the timing of events relative to trust funding and distributions. Because protections can vary, it is important to tailor the trust language to the family’s needs and to consider complementary planning tools when substantial creditor or divorce risk exists. Our firm reviews state law implications and trust drafting options to pursue the strongest practical protection available while keeping the trust operational and consistent with beneficiaries’ needs.
Because an ILIT is irrevocable, making changes after it is created can be challenging. In some cases, legal techniques such as decanting, consent-based amendments, or court-approved modifications may permit adjustments, but these options depend on trust terms and state law. Sometimes reformation is possible to correct errors or to address unanticipated tax or administrative issues. When changes are needed, careful legal analysis is required to avoid undermining the trust’s tax treatment or protective features. Given these constraints, thoughtful initial drafting and periodic reviews are the best ways to keep the trust aligned with changing circumstances. If modifications become necessary, we evaluate available legal remedies and work with trustees and beneficiaries to pursue appropriate steps in compliance with governing law.
An ILIT should be integrated with your broader estate plan to avoid conflicting beneficiary designations and to ensure a coherent approach to asset distribution. This involves reviewing revocable living trusts, wills, retirement account beneficiary forms, and payable-on-death designations to confirm that ownership and beneficiary arrangements reflect your intentions. Coordination prevents unwanted estate inclusion or disputes that could undermine the effectiveness of the ILIT and other documents. We help clients align these components by conducting a comprehensive document review and recommending adjustments where needed. Proper synchronization ensures that life insurance proceeds held by the ILIT are administered as intended and that other assets pass to heirs according to the overall estate plan.
To get started with an ILIT in San Lorenzo, contact the Law Offices of Robert P. Bergman for a consultation to discuss your assets, current policies, and goals. During the initial meeting we will review your situation, explain the options available, and recommend whether an ILIT or another planning tool best suits your needs. We will also explain the steps, timeline, and administrative considerations involved in creating and funding the trust. If you proceed, we will draft the trust document, assist with policy transfers or purchases, and set up funding procedures and notices. We work with your financial advisors and the insurance carrier to implement the plan and provide ongoing support to trustees and beneficiaries as needed throughout the life of the trust.
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