An Irrevocable Life Insurance Trust (ILIT) can be a powerful tool for preserving life insurance proceeds, minimizing estate tax exposure, and ensuring that beneficiaries receive death benefits as intended. In Fort Dick and throughout Del Norte County, the Law Offices of Robert P. Bergman helps residents understand how an ILIT functions, who should consider one, and how it interacts with other estate planning documents such as wills, revocable living trusts, and powers of attorney. This page explains the basics and practical considerations so you can decide whether an ILIT is appropriate for your circumstances.
Choosing to create an ILIT involves important decisions about trust terms, trustee duties, funding, gift tax considerations, and beneficiary designations. This page lays out the process step by step, offers plain-language explanations of key legal terms, and compares ILITs to alternative strategies. Whether you are planning for business succession, estate tax mitigation, or providing for family members, understanding the role of the ILIT in a broader estate plan will help you make informed choices and avoid common mistakes that can cause unintended tax or probate consequences.
An ILIT matters because it separates life insurance proceeds from your taxable estate, which can reduce estate tax exposure and preserve value for beneficiaries. Placing a policy inside an ILIT also allows for more controlled distribution of proceeds, protection from creditors in many circumstances, and the ability to plan for liquidity needs such as paying estate taxes or debts. When structured and funded correctly, an ILIT offers predictable administration, potential tax savings, and peace of mind that beneficiary intentions are honored. The trust terms can be tailored to address family dynamics, minor children, and other planning goals.
The Law Offices of Robert P. Bergman provides estate planning services tailored to the needs of individuals and families in Fort Dick and throughout California. Our approach emphasizes clear communication, careful drafting, and practical solutions that fit each client’s financial and family circumstances. We guide clients through trust formation, funding, and administration, explaining tax considerations and coordinating with financial institutions and insurers as needed. Our goal is to ensure that an ILIT integrates smoothly with your overall estate plan so that assets are protected and distributed according to your wishes.
An ILIT is a trust that owns a life insurance policy and removes the proceeds from the insured’s taxable estate when properly structured. It operates under trust terms that designate trustees, beneficiaries, and distribution rules, and it commonly includes provisions for gifts to the trust to pay premiums. To be effective for tax purposes, the policy must be irrevocable and the insured must not retain incidents of ownership. Proper setup and timing are essential to avoid estate inclusion. The ILIT may also contain instructions about how proceeds should be used, whether for income replacement, education, or paying estate expenses.
Funding an ILIT typically requires making gift contributions to the trust so the trustee can pay policy premiums, or transferring an existing policy to the trust with attention to applicable tax rules and potential three-year inclusion periods. Trustees have fiduciary responsibilities such as handling premium payments, filing tax returns if necessary, and distributing proceeds in accordance with the trust document. Working with legal counsel and financial institutions helps ensure premium payments are coordinated, gift tax returns are prepared when required, and the trust maintains its intended tax and probate benefits over time.
An ILIT is a legal entity that becomes the owner and beneficiary of a life insurance policy, removing that policy’s death benefit from the insured’s probate estate when done properly. The insured gives up ownership rights, making the trust ‘irrevocable,’ and designates a trustee to manage the policy and trust assets. The trustee is responsible for premium payments and for distributing proceeds to named beneficiaries under the trust’s terms. This structure can limit estate inclusion and provide greater control over how insurance proceeds are paid and used after the insured’s death.
Establishing an ILIT involves drafting the trust document with clear terms, appointing an able trustee, deciding on beneficiary designations, and arranging for funding through gifts or policy transfers. The trust should specify how proceeds will be used, whether to pay debts, provide for family members, or fund other trusts. Trustees will often coordinate with insurance carriers to issue or transfer policies and manage premium payments. Attention to tax rules, such as the three-year inclusion rule for transfers of existing policies, is essential to preserve the intended benefits of the trust.
Below are common terms you will encounter when discussing ILITs, accompanied by straightforward definitions. Understanding these phrases helps you make informed decisions about trust provisions, funding, trustee duties, and tax considerations. If any term is unclear, our office can explain how it applies to your specific plan and how decisions about trustee selection, beneficiary designations, and trust duration affect the overall outcome for your heirs and estate.
An irrevocable trust is a trust that cannot be altered, amended, or revoked by the grantor once it has been executed, except under very limited circumstances specified by the trust or by court order. Placing a life insurance policy into an irrevocable trust generally removes the policy’s death benefit from the grantor’s taxable estate, provided the grantor does not retain any ownership rights. The irrevocable nature provides stability for beneficiaries and can offer creditor protection in some situations, but it also requires the grantor to give up direct control over the insured policy and related assets.
Trustee duties refer to the legal responsibilities of the person or institution appointed to manage the trust. Duties typically include managing trust assets prudently, making timely premium payments, keeping accurate records, communicating with beneficiaries, and following the trust’s distribution instructions. The trustee acts in a fiduciary capacity and must avoid conflicts of interest while administering the trust in accordance with state law and the trust terms. Choosing a trustee who understands insurance administration and trust accounting is important for reliable ongoing performance.
Gift tax considerations arise when the grantor makes contributions to the ILIT to fund policy premiums. These gifts may need to be reported on a gift tax return if they exceed annual exclusion amounts, and certain techniques, like limited powers of appointment or Crummey withdrawal powers, can be used to qualify contributions for annual exclusion treatment. Proper planning helps minimize unexpected gift tax exposure and ensures that premium payments into the trust are treated as intended under federal tax rules, which can affect the trust’s long-term effectiveness.
The three-year inclusion rule applies when a life insurance policy is transferred to an ILIT shortly before the insured’s death. Under this rule, if an insured transfers a policy to a trust within three years of death, the policy proceeds may still be included in the insured’s taxable estate. To avoid inclusion, transfers should be made well before the three-year period ends, or the trust should purchase a new policy with the ILIT as the owner. Awareness of this rule is important when timing transfers and policy replacements.
An ILIT differs from other estate planning tools such as revocable living trusts and simple beneficiary designations in that it is designed specifically to own life insurance and remove proceeds from the taxable estate. Revocable trusts offer flexibility and control during life but do not shield assets from estate inclusion while the grantor retains ownership rights. Naming beneficiaries directly is simple but may lack control, creditor protection, or tax planning benefits. Evaluating goals such as tax mitigation, control over distributions, and asset protection helps determine which option or combination of tools is most effective.
A limited approach, such as keeping a policy outside a trust and relying on beneficiary designations, may be appropriate for households where estate tax exposure is unlikely due to modest asset levels. When the estate is well below the federal or state exemption thresholds and creditor concerns are minimal, the simplicity of direct beneficiary designations can reduce administrative burdens. This approach can be easier to manage and avoids the need for trust funding logistics, gift reporting, and trustee involvement. Still, this choice should be reviewed periodically as circumstances and tax laws change.
For individuals who prioritize simplicity and want life insurance proceeds to pass immediately to named beneficiaries without trust administration, a limited arrangement may make sense. Direct beneficiary designations deliver liquidity quickly to cover immediate expenses and do not require creating or funding a trust. This approach can be particularly suitable where family relationships are straightforward and there is confidence the proceeds will be used responsibly. It is important to weigh that convenience against potential lack of control, tax planning opportunities, and protection from creditors or beneficiary mismanagement.
A comprehensive ILIT-based plan is often appropriate for individuals with substantial assets or complex family dynamics, where estate tax exposure, business succession, blended-family concerns, or creditor protection are priorities. An ILIT can be integrated with other trusts to achieve coordinated goals, such as providing for a surviving spouse while preserving assets for children from a prior marriage. Detailed planning helps ensure that insurance proceeds are allocated according to long-term objectives and that the overall estate plan functions cohesively across different types of assets and legal documents.
When you want to control how insurance proceeds are used over time, such as providing staged distributions for beneficiaries, funding education, or protecting assets from creditors, a comprehensive approach using an ILIT allows for tailored distribution terms and trustee oversight. This level of control is especially valuable when beneficiaries are minors, have special needs, or might otherwise face financial challenges. The trust can set precise conditions and timelines for payments, creating a structured plan that balances immediate needs with long-term preservation of assets.
A comprehensive ILIT strategy can protect the value of life insurance proceeds from estate taxes and provide clear instructions for distribution that reflect your values and priorities. By integrating the ILIT with wills, revocable trusts, and powers of attorney, the plan ensures consistency across documents and can prevent unintended consequences such as probate delays or beneficiary disputes. Trustees can be instructed to manage proceeds prudently for long-term needs, offering stability and predictability that simple beneficiary designations may not provide.
In addition to tax and distribution benefits, a complete strategy can include provisions to address potential creditor claims, provide for business continuity, and coordinate with retirement and investment accounts. This holistic view helps avoid gaps that might leave loved ones without necessary liquidity to settle estate obligations. Working through each component—trust terms, funding mechanisms, insurance policy ownership, and beneficiary alignment—reduces the likelihood of disputes and makes administration smoother for trustees and family members after a death.
One primary benefit of using an ILIT is the potential to remove policy proceeds from the taxable estate, preserving wealth for beneficiaries and easing the burden of estate taxes. By ensuring the trust owns the policy and the insured has no retained incidents of ownership, the death benefit generally passes outside of probate and estate inclusion. This planning helps maintain the intended value of life insurance proceeds, allowing beneficiaries to use funds for debts, taxes, education, or long-term financial stability without a large portion being lost to estate obligations.
Another key benefit is the ability to set specific distribution instructions that protect beneficiaries from impulsive spending or creditor claims. The ILIT’s terms allow you to create conditions for payouts, stagger distributions over time, or provide funds for particular purposes such as healthcare, education, or business succession. Trustees can manage proceeds with a long-term view, offering continuity and financial oversight. This tailored control ensures that the life insurance proceeds serve the needs intended by the grantor rather than being quickly depleted or misapplied.
One practical tip is to address policy ownership and funding well in advance of any anticipated need so the trust’s intended benefits are preserved. Early coordination allows you to decide whether to have the ILIT purchase a new policy or to transfer an existing policy while observing the relevant timing rules that affect estate inclusion. It is also important to arrange the premium funding mechanism so trustees can pay without delay, whether through annual gifts to the trust or other funding structures designed to qualify for gift tax exclusions and ensure uninterrupted coverage.
Regularly review beneficiary designations, trust terms, and related estate planning documents to reflect major life events such as marriage, divorce, births, or changes in financial circumstances. Consistency between the ILIT terms, life insurance policy designations, and other estate planning documents avoids conflicts that can complicate administration. Updating records and communicating your plan to trustees and key family members reduces uncertainty and helps ensure that the policy proceeds are distributed as intended after your death.
Consider an ILIT if your goals include removing life insurance proceeds from your taxable estate, providing structured distributions to heirs, protecting proceeds from creditor claims, or ensuring liquidity to pay estate expenses. An ILIT is particularly useful when you want to preserve the value of a death benefit for future generations or align insurance proceeds with broader estate planning objectives. Evaluating these goals in light of your financial picture and family dynamics helps determine whether an ILIT is an appropriate component of your plan.
You may also consider an ILIT when coordinating life insurance with business succession plans, retirement asset protection, or when beneficiaries have special financial needs. The trust structure allows specific directions for how funds are to be used and provides mechanisms to oversee distributions over time. Discussing these reasons with legal counsel helps clarify whether an ILIT should be combined with other trust instruments and ensures that funding, trustee selection, and drafting choices align with your desired outcomes for protecting and directing life insurance proceeds.
Common circumstances that lead people to establish an ILIT include high net worth where estate taxes are a concern, blended families where controlled distributions are needed, owners of small businesses seeking liquidity for succession, and situations involving potential creditor exposure. Other scenarios include wanting to provide for minor children, leave a legacy for education or charitable purposes, or coordinate life insurance with a comprehensive estate plan. Each situation warrants careful consideration of trust terms and funding strategies to achieve the desired outcomes.
When an estate approaches or exceeds applicable exemption thresholds, an ILIT can be an effective vehicle to exclude life insurance proceeds from the taxable estate, preserving more value for heirs. Trustees can receive and manage the death benefit outside of probate, reducing estate inclusion and providing funds to meet estate tax obligations if necessary. Planning ahead is essential so transfers and ownership changes occur outside the three-year lookback window and so funding mechanisms are established to support premium payments without inadvertently triggering transfer taxes.
Blended families often have competing priorities for asset distribution, and an ILIT allows a grantor to specify how life insurance proceeds will be used, protecting certain inheritances for children while still providing for a surviving spouse. The trust can outline staged distributions, income provisions, or conditions for receiving funds, reducing the potential for disputes and ensuring that the grantor’s intentions are honored. Carefully tailored terms provide clarity and protect benefits intended for specific family members or purposes over time.
Business owners can use an ILIT to provide liquidity for buy-sell agreements, estate settlement costs, or to equalize inheritances among heirs who are not involved in the business. The death benefit can be earmarked to purchase business interests from heirs or to fund transition expenses, helping maintain business continuity. Integrating the ILIT with succession documents and coordinating with accountants ensures the life insurance proceeds serve their intended role in smoothing ownership transitions and fulfilling business-related obligations without disrupting operations.
We serve Fort Dick and surrounding communities with practical legal guidance on establishing and administering ILITs. Our office assists with drafting trust instruments, coordinating premium funding, transferring or purchasing policies under the trust, preparing any necessary gift tax filings, and explaining trustee responsibilities. We work with financial institutions and insurers to ensure smooth implementation. If you are considering an ILIT, contacting our office can clarify timing, costs, and how the trust will integrate with your overall estate plan to protect intended beneficiaries.
The Law Offices of Robert P. Bergman offers practical, client-focused guidance for establishing an ILIT that aligns with your estate planning goals. We prioritize clear explanations of tax rules, trustee duties, and funding mechanisms while crafting trust language that reflects your wishes for distributions and beneficiary protections. Our approach involves coordinating with insurers and financial advisors to make sure the trust is properly funded and administered, and we provide ongoing support for trustee transitions and any required filings. Clients benefit from attention to detail and a thoughtful plan tailored to their needs.
When working with our office, clients receive individualized attention to ensure their ILIT is integrated with wills, revocable trusts, powers of attorney, and other estate planning documents. We explain the practical steps to transfer or acquire policies, help set up gift strategies to fund premiums, and advise on trustee selection and backup provisions. Our goal is to reduce uncertainty and create a reliable framework so that insurance proceeds are preserved and distributed per your instructions, minimizing administrative friction for your loved ones in the future.
We also focus on explaining timing concerns, such as the implications of transferring existing policies and the need to avoid unintended estate inclusion, so you can make informed decisions about purchasing a new policy or transferring an existing one. Our office can prepare the required documentation, help with recordkeeping for premium funding, and work with trustees to establish processes for claims and distributions. This comprehensive assistance helps provide confidence that your plan will operate as intended when it matters most.
Our process begins with an initial consultation to review your assets, family circumstances, and goals for life insurance proceeds. We then recommend whether an ILIT fits your plan and outline options for funding and policy ownership. After agreeing on trust terms, we draft the ILIT document, coordinate policy transfers or purchases, and advise on gift reporting and trustee procedures. We guide trustees through administrative responsibilities and remain available for updates, trustee changes, or modifications to related estate planning documents to keep the plan aligned with evolving needs.
In the first step we evaluate your financial situation, life insurance holdings, and estate planning objectives. This review includes assessing current policies, projected premiums, family needs, and potential estate tax exposure. We discuss how an ILIT would function in your overall plan and the timing considerations for policy transfers or new purchases. By clarifying goals—such as preserving wealth, protecting beneficiaries, or funding business succession—we can recommend trust provisions and funding arrangements that align with your priorities and reduce the risk of unintended consequences.
During this conversation we explore how you want proceeds to be used, who should receive them, and whether distributions should be controlled over time. We consider the needs of spouses, children, grandchildren, and any charitable intentions, and discuss protective measures such as spendthrift provisions or staged distributions. This helps shape trust language and determine whether the ILIT should coordinate with other planning tools, ensuring that decisions made now will reflect long-term family objectives and provide the desired protections for beneficiaries.
We review any current life insurance policies to determine whether to transfer them into the trust or have the trust purchase new coverage. This analysis covers premium obligations, policy loans, surrender values, and the potential tax implications of transfers. We also discuss funding options for paying premiums, including the use of annual gifts, and analyze how those gifts should be structured to qualify for available exclusions. This ensures the trust remains funded and the policy stays in force to deliver the intended benefit.
After deciding on the trust structure and funding approach, we prepare the ILIT document with clear terms for trustee powers, beneficiary distributions, and premium funding mechanics. We address contingencies such as trustee succession, trust termination, and coordination with related estate planning documents. The trust is executed in accordance with state law, and we work with the trustee to establish procedures for accepting gifts, making premium payments, and keeping records. Finalizing these details minimizes ambiguity and streamlines later administration.
When drafting the ILIT, we carefully define trustee powers to manage the policy, pay premiums, and invest trust assets when appropriate. Distribution terms are specified to reflect your intentions, whether immediate lump sums, staged payments, or conditional releases for specific purposes like education or healthcare. Clear drafting reduces the risk of disputes and gives trustees a roadmap for administration. We also include instructions regarding coordination with beneficiary designations and other estate documents to ensure consistent outcomes.
Once the trust document is signed, we coordinate with insurance carriers to transfer ownership or arrange for a new policy in the trust’s name. This step often requires beneficiary and ownership changes, carrier forms, and documentation confirming the trust’s existence. We ensure the trustee has the necessary authority to manage the policy and that premium payment processes are in place. Proper execution and coordination help maintain continuous coverage and preserve the ILIT’s intended estate and tax benefits.
After formation and policy ownership are established, the trustee must follow funding procedures and administer the trust according to its terms. This includes accepting gifts from the grantor for premiums, keeping accounting records, handling claims, and making distributions to beneficiaries. We provide guidance to trustees on best practices, help with required tax filings, and remain available for plan reviews as family circumstances or tax laws change. Ongoing support ensures the ILIT continues to meet its intended objectives over time.
Trustees should maintain accurate records of gifts, premium payments, communications with insurers, and any distributions made from the trust. Good recordkeeping helps support the trust’s tax position and provides documentation necessary for claim processing and accounting to beneficiaries. Trustees must also ensure premiums are paid on time to avoid policy lapse and coordinate with the grantor about regular funding contributions. These administrative steps are essential to protect the trust’s benefits and ensure a smooth transition at the time of claim.
Regular reviews of the ILIT and the overall estate plan are recommended to address changes in family circumstances, policy performance, and tax laws. During reviews we assess whether premium funding remains adequate, whether trustee or beneficiary changes are needed, and whether any revisions to related estate planning documents are advisable. While the ILIT is irrevocable, surrounding plans and funding strategies may require adjustments to maintain alignment with goals. Proactive maintenance helps preserve the trust’s benefits and avoid surprises for heirs.
An Irrevocable Life Insurance Trust is a trust that owns a life insurance policy and is designed to remove the policy’s death benefit from the insured’s taxable estate when properly structured. The grantor transfers ownership and control of the policy to the trust, and the trustee manages the policy and any trust assets in accordance with the trust document. The ILIT provides a mechanism to direct how proceeds will be distributed, whether to pay estate obligations, support family members, or fund other trust arrangements, allowing greater control and potential tax benefits. Establishing an ILIT typically involves careful drafting, trustee selection, and coordination with insurance carriers to ensure the trust is the policy owner and beneficiary. Timing and funding strategies matter because certain transfers may be subject to estate inclusion if made shortly before death. Once the trust holds the policy, the trustee handles premium payments and claims, and distributions are made according to the trust’s terms, providing a structured approach for managing insurance proceeds that aligns with your estate planning objectives.
An ILIT is commonly funded through gifts from the grantor to the trust so the trustee can pay policy premiums, or through transferring ownership of an existing policy into the trust. Annual gift tax exclusion rules can often be used to make premium contributions tax-free if the trust includes withdrawal powers and beneficiaries are given notice. The trustee uses the gifted funds to pay premiums, and accurate recordkeeping is important for tax reporting and to demonstrate the intent and timing of contributions. Different funding approaches have distinct implications. Purchasing a new policy within the ILIT avoids certain timing concerns, while transferring an existing policy requires attention to the three-year lookback rule that could cause estate inclusion. Proper coordination with tax and insurance professionals helps ensure funding and transfers are carried out in a way that preserves the ILIT’s intended benefits and minimizes unexpected tax consequences.
Transferring an existing life insurance policy into an ILIT is possible, but it requires careful consideration of timing, policy loans, and beneficiary designations. If the insured transfers a policy into an ILIT within three years of death, the policy proceeds may still be included in the insured’s estate under the three-year rule. Additionally, outstanding loans or surrender values can complicate the transfer and may require adjustments to maintain coverage and trust objectives. Before transferring a policy, it is important to review its terms, premium schedule, and cash value to determine whether a transfer or the purchase of a new policy better serves your goals. Coordinating with the insurer to complete ownership and beneficiary change forms correctly and ensuring the trustee has the authority to manage the policy are essential steps. Thoughtful planning helps avoid lapses in coverage and preserves the ILIT’s expected benefits.
The three-year rule refers to the tax provision that treats transfers of life insurance policies within three years of the insured’s death as still part of the taxable estate. This means if you transfer an existing policy into an ILIT and then die within three years, the death benefit could be included in your estate for tax purposes, undermining the primary tax advantage of the trust. This rule makes timing of transfers especially important and can influence whether purchasing a policy within the ILIT is preferable to transferring an existing policy. To address this concern, many people opt to have the ILIT purchase a new policy directly or transfer policies well in advance of the three-year window. Legal counsel can also advise on structuring transfers, funding arrangements, and whether other planning techniques might reduce the risk of estate inclusion. Clear planning helps ensure that the trust functions as intended for tax and distribution purposes.
A trustee can be an individual, such as a trusted family member, or a professional such as a bank or trust company, depending on the complexity of administration and your comfort with their skills. The trustee’s responsibilities include managing the trust’s assets, paying premiums, keeping accurate records, interacting with insurers, filing any necessary tax returns, and distributing proceeds according to the trust’s terms. Choosing someone reliable and organized is important because trustees play a central role in preserving the trust’s benefits and carrying out your instructions. Successor trustees should be named to ensure continuity if the initial trustee is unable to serve. The trust document can grant trustees clear powers to manage policies, grant limited discretionary authority for distributions, and provide guidance for dealing with unexpected situations. Well-drafted trustee provisions help reduce disputes and provide a roadmap for administration that aligns with the grantor’s objectives.
An ILIT functions alongside other estate planning documents by handling life insurance ownership and proceeds, while a will and revocable living trust typically handle other assets and disposition instructions. The ILIT should be coordinated with beneficiary designations and any revocable trusts to prevent conflicting instructions and unintended tax or probate consequences. For example, naming a revocable trust as a beneficiary or ensuring consistent beneficiary designations helps align outcomes across documents and simplifies administration after death. During estate planning reviews it is important to ensure that the ILIT’s terms and ownership provisions are consistent with your overall plan and that related documents, such as pour-over wills or revocable trusts, reflect the presence of the ILIT. This coordination reduces administrative complexity and helps confirm that insurance proceeds are distributed as intended without contradictory instructions from other estate planning instruments.
An ILIT can offer protection from certain creditor claims for beneficiaries, depending on the trust terms and applicable state law. By holding life insurance in trust and specifying how proceeds are distributed, the trust can create a layer of protection that prevents direct ownership by beneficiaries until distributions are made. This structure can help shield proceeds from beneficiary creditors, divorce claims, or poor financial management when properly drafted with appropriate spendthrift and protective provisions. However, protections are not absolute and can be influenced by state-specific laws, timing of transfers, and the particular circumstances of creditors’ claims. It is important to draft trust provisions carefully and to consider other asset protection strategies as part of a holistic plan. Legal guidance helps structure the trust to offer meaningful protective features while staying within the bounds of applicable law.
If a trustee can no longer serve, the ILIT document should name one or more successor trustees and provide instructions for trustee replacement and authority. The successor trustee steps into the role, continuing administration tasks such as premium payments, recordkeeping, and distributions. Having clear succession provisions reduces administrative delays and ensures continuity of management, which is particularly important to prevent policy lapses and to honor the grantor’s distribution intentions without interruption. When naming successors, consider backup options and whether a neutral professional or corporate trustee might be appropriate if family members are unwilling or unable to fulfill administrative duties. The trust can also allow for trustee resignation and appointment procedures, clarifying how new trustees are selected and how powers are transferred to maintain consistent administration over time.
Gift tax reporting may be required when funding an ILIT if contributions made to the trust exceed annual exclusion amounts. Many ILITs use Crummey withdrawal powers or similar mechanisms to qualify contributions for the annual exclusion so premiums can be gifted without triggering gift taxes. Even when exclusions apply, proper documentation and timely filing of gift tax returns when required help ensure compliance and provide a clear record of the funding strategy for the trust. The specifics of reporting depend on the amounts gifted and how the trust is structured, so it is advisable to keep detailed records of contributions, notices to beneficiaries, and trustee actions. Coordinating with tax advisors ensures that gift tax returns are prepared correctly when necessary and that the funding approach aligns with both tax planning goals and the trustee’s administrative procedures.
An ILIT can be structured to provide for minor children or beneficiaries with special needs by including distribution provisions tailored to those individuals. For minor children, the trust can specify amounts for education, healthcare, or living expenses and set age-based or milestone-based distribution triggers. For beneficiaries with special needs, the ILIT can direct funds to supplemental benefits while preserving eligibility for public assistance programs, provided the trust is drafted to avoid disqualifying distributions and to complement existing special needs planning. Careful drafting and coordination with other planning documents are essential to ensure that distributions meet a beneficiary’s needs without causing unintended consequences. Working with legal counsel familiar with special needs planning and public benefit rules helps craft trust language that balances support with protection, preserving access to necessary benefits while providing additional resources through the ILIT.
Criminal Defense
Homicide Defense
Manslaughter
Assault and Battery
Assault with a Deadly Weapon
Battery Causing Great Bodily Injury
Domestic Violence
Domestic Violence Protection Orders
Domestic Violence Restraining Order
Arson Defense
Weapons Charges
Illegal Firearm Possessions
Civil Harassment
Civil Harassment Restraining Orders
School Violence Restraining Orders
Violent Crimes Defense
Estate Planning Practice Areas