An Irrevocable Life Insurance Trust (ILIT) is a planning tool many families in Willows and Glenn County use to control life insurance proceeds while managing estate tax exposure and protecting benefits for beneficiaries. This page explains how an ILIT functions, who may benefit from it, and how it interacts with other estate planning documents such as revocable living trusts, pour-over wills, and powers of attorney. We describe practical considerations for funding the trust, naming trustees and beneficiaries, and maintaining trust formalities to achieve intended results over time.
Choosing to establish an ILIT typically follows a careful assessment of family goals, financial circumstances, and long-term legacy planning. An ILIT can keep life insurance proceeds outside of a taxable estate, provide creditor protection for heirs, and offer structured distributions for different beneficiaries or situations. This guide covers common scenarios that prompt clients to use an ILIT, steps in the trust creation and administration process, and important interactions with retirement plan designations, irrevocable trust documents, and healthcare directives to ensure a coordinated plan.
An ILIT can play a pivotal role in transferring wealth efficiently and according to your intentions. By placing a life insurance policy in an irrevocable trust, the death benefit may be excluded from the insured’s taxable estate, potentially reducing estate tax exposure. The trust structure also allows for clear guidance on how proceeds are distributed, protecting assets from beneficiary creditors and providing for minor children or family members with special needs through tailored distribution terms. Trust administration provisions further enable appointed trustees to manage proceeds responsibly after the insured’s death.
The Law Offices of Robert P. Bergman assists clients across California with thoughtful estate planning solutions, including irrevocable life insurance trusts and related documents. Our approach emphasizes clear communication, careful drafting, and coordination of all trust and estate instruments to reflect clients’ objectives. We help with the full lifecycle of trust planning — from selecting appropriate trust terms and trustees to funding the trust and advising on administration and post-death tasks. Clients receive step-by-step support tailored to their family dynamics, financial profile, and long-term wishes.
An Irrevocable Life Insurance Trust is created to own and control a life insurance policy separate from the insured’s personal assets. Once established and funded, the trust generally cannot be altered by the person who created it, which is why careful initial planning is essential. The trust holds the policy and receives income upon the insured’s death, with the trustee distributing or managing proceeds according to the trust’s terms. Common goals include removing death proceeds from the taxable estate, providing creditor protection, and controlling the timing and manner of distributions to beneficiaries.
The process of setting up an ILIT involves drafting trust documents, naming a trustee and beneficiaries, transferring or having the trust purchase a life insurance policy, and managing gift tax considerations when transferring policy ownership or paying premiums. Trustees have fiduciary duties to administer the trust consistent with its terms and beneficiaries’ interests. Maintaining proper records and following formalities is essential to preserve the trust’s intended tax and creditor protections, and the trust should be integrated with other estate planning documents such as wills, powers of attorney, and healthcare directives.
An Irrevocable Life Insurance Trust is a legal arrangement in which a trust, rather than an individual, owns a life insurance policy. The trust document sets the rules for how proceeds will be managed and distributed after the insured’s death. Because the policy is owned by the trust and not the insured, the proceeds are typically not included in the insured’s probate estate. This structure allows for directed distributions, protection from creditors, and the possibility of minimizing estate tax consequences when aligned with other planning measures and properly funded and administered.
Core elements of an ILIT include the trust agreement, the trustee appointment, beneficiary designations, instructions for premium payments, and provisions for trust administration. The process often begins with drafting tailored trust provisions that reflect the grantor’s intentions, transferring an existing policy or arranging for the trust to purchase a new policy, and setting up mechanisms for making gifts to cover premiums if necessary. Trustees must keep accurate records, manage investments if funds are held, and follow the distribution rules and reporting requirements spelled out in the trust document and relevant tax law.
Familiarity with common terms helps clients make informed decisions. Important vocabulary includes grantor, trustee, beneficiary, insured, funding, gift tax, estate tax, irrevocable, trustee duties, and creditor protection. Understanding these concepts clarifies how an ILIT operates and the obligations of each party. This section provides plain-language definitions so clients can confidently review their trust documents and ask informed questions during planning meetings. Clear definitions also support coordination with other documents like wills and powers of attorney.
The grantor is the person who creates the trust and transfers ownership of the life insurance policy into the trust. Once the trust is established and the policy is transferred or purchased by the trust, the grantor typically cannot change the trust’s terms, which is why careful up-front planning is important. The grantor’s decisions about beneficiaries, trustees, and distribution language shape how proceeds will be managed. Gift and estate tax considerations often depend on timing of transfers and the relationship between the grantor and the insured for tax purposes.
The trustee is responsible for administering the ILIT according to the trust agreement and legal obligations. Duties include managing trust assets, making distributions per the trust’s instructions, keeping accurate records, filing required tax returns, and acting in the beneficiaries’ best interests. Trustees must follow the trust’s terms precisely, especially when interpreting distribution standards or handling creditor claims. Choosing a trustee who will communicate clearly with beneficiaries and handle administrative responsibilities is an important planning consideration for long-term trust effectiveness.
A beneficiary is any person or entity entitled to receive trust benefits under the ILIT’s terms. Beneficiaries can include spouses, children, other relatives, charities, or trusts for minors or individuals with special needs. The trust document can set conditions and schedules for distributions, such as staggered age-based payments, health and education allowances, or lifetime maintenance provisions. Proper beneficiary designation and coordination with other estate documents are key to ensuring each person or organization receives the intended share without unintended tax or creditor complications.
Funding an ILIT usually involves transferring an existing life insurance policy into the trust or arranging for the trust to purchase a new policy while ensuring gift tax rules and three-year lookback rules are considered. Grantors sometimes make annual gifts to the trust to cover premiums, using annual gift tax exclusions or other gifting strategies. Properly funding the trust and documenting premium payments are essential to preserve the trust’s intended tax and asset protection benefits and to avoid accidental inclusion of the policy proceeds in the grantor’s estate.
Choosing among an ILIT, a revocable living trust, or other estate planning tools depends on goals such as tax planning, creditor protection, and flexibility. A revocable living trust offers flexibility and control during life but does not exclude assets from the taxable estate. An ILIT is less flexible once created but can help exclude life insurance benefits from estate calculations. Other strategies, such as naming beneficiaries directly or using payable-on-death designations, may be appropriate in limited circumstances. A careful review of family needs and financial impact informs the best approach.
For individuals whose estates fall well below federal and state estate tax thresholds, a straightforward beneficiary designation or a revocable living trust might satisfy planning needs without creating an irrevocable trust. In such cases, focusing on clear beneficiary designations, updated wills, and basic powers of attorney can ensure assets transfer smoothly and families avoid probate-related delays. It’s important to balance ease and flexibility with future needs, revisiting plans as circumstances change to determine whether more complex measures like an ILIT become warranted.
If flexibility during life is a top priority — for instance, when a grantor expects significant changes in assets or beneficiaries — a revocable trust or beneficiary designations may be preferable because they allow modification as circumstances evolve. Such arrangements offer straightforward administration while still enabling some control over how assets are distributed. When future financial or family situations are unpredictable, preserving the ability to change plan documents may outweigh the benefits of irrevocable solutions that limit later adjustments.
When estates are substantial or when clients wish to provide for multiple generations, nuanced planning becomes important to balance tax considerations and long-term family needs. A comprehensive approach integrates ILITs with revocable trusts, retirement plan trust provisions, special needs trusts, and ancillary documents like advance health care directives to create a cohesive plan. This coordination reduces the risk of conflicting terms, unintended tax consequences, or administrative burdens for survivors and ensures that legacy goals are supported across different types of assets and potential future events.
Comprehensive planning can address specific concerns such as protecting assets for beneficiaries who may face creditor claims, divorce, or special needs. Trust structures can be tailored to preserve benefits and control distributions, while guardianship nominations and health directives provide additional protections. Integrating life insurance within a trust framework helps preserve proceeds for intended beneficiaries while limiting exposure to estate claims. Thorough planning also helps trustees understand their duties and creates practical mechanisms for administration and dispute avoidance.
A coordinated planning strategy offers clarity, efficiency, and a higher likelihood that assets will pass according to your intentions. Combining an ILIT with other trust instruments and estate documents helps minimize probate complications, address tax planning goals, and manage distributions over time. It also provides a framework for naming appropriate decision-makers, such as trustees and guardians, and for specifying how financial and health care decisions should be handled. This reduces uncertainty for family members and creates a roadmap for smooth post-death administration.
Integrated planning can also reduce administrative burdens and help avoid conflicts among beneficiaries by establishing clear rules, timelines, and decision-making authorities. With consistent terms across documents, trustees and personal representatives can act efficiently. In addition, by considering gifting strategies, funding mechanisms, and the interaction of retirement accounts and insurance proceeds, the plan can preserve more value for heirs. Regular reviews ensure the plan remains aligned with changing laws, family circumstances, and financial conditions.
A primary advantage of integrating an ILIT into an overall plan is the potential to reduce estate tax exposure when the trust is properly funded and maintained. Removing life insurance proceeds from probate and from the grantor’s estate can lower the taxable estate and preserve wealth for beneficiaries. Thorough planning takes into account timing rules, gift tax considerations, and required trust formalities so the intended tax benefits are realized. This aspect of planning is especially relevant for clients with multiple sizable assets and intergenerational goals.
An ILIT provides a mechanism to direct how insurance proceeds are used — whether to pay debts, provide for a surviving spouse, fund education, or support charitable goals. By naming a trustee and establishing distribution standards, grantors can limit direct access to large sums that might otherwise be exposed to creditors, divorce settlements, or imprudent spending. This level of control helps sustain benefits for intended recipients while giving trustees authority to make prudent financial decisions in alignment with the trust’s goals.
Before establishing an ILIT, identify the specific objectives you want the trust to achieve, such as estate tax reduction, creditor protection, or structured support for heirs. Clarifying priorities helps shape trust provisions, such as distribution timing, trustee powers, and funding mechanisms. Discuss family dynamics openly and list potential beneficiaries and contingent beneficiaries. A clear goal statement also supports coordination with other documents like wills, powers of attorney, and health care directives so that each instrument reinforces the overall plan.
To preserve the intended benefits of an ILIT, ensure proper funding and maintain detailed records of policy transfers, premium payments, and trustee actions. If the grantor makes gifts to the trust to pay premiums, keep gift documentation and consider using annual gift tax exclusions when appropriate. Trustees should keep contemporaneous records of distributions, communications with beneficiaries, and tax filings. Good documentation supports the trust’s tax position and provides clarity for beneficiaries and fiduciaries during administration.
Families often consider an ILIT when preserving life insurance proceeds outside the taxable estate is a priority, especially for individuals with significant assets or complex family situations. An ILIT can protect proceeds from probate and from being included in estate calculations, provide structured support for beneficiaries, and allow for tailored distribution rules. Others seek an ILIT to coordinate insurance benefits with estate liquidity needs, pay estate taxes, or fund trusts established for minors or persons with disabilities, ensuring a stable financial legacy.
An ILIT may also be appropriate to protect assets from creditor claims or divorces affecting beneficiaries, or to create a disciplined approach to distributing large sums over time. When clients have specific philanthropic objectives, an ILIT can direct insurance proceeds to charities while balancing family provisions. Because ILITs are irrevocable, they require thoughtful planning and integration with wills, health care directives, and powers of attorney to create a holistic plan that aligns with personal wishes and long-term family protection goals.
Common circumstances that lead individuals to pursue an ILIT include high net worth, desire to reduce estate tax exposure, concern about providing for young children or beneficiaries with special needs, and the need to preserve benefits from life insurance for specific purposes. Business owners may use an ILIT to fund buy-sell agreements or provide liquidity for estate settlement. Additionally, people who want to create durable, managed distributions over time often find an ILIT provides the structure and protection they need.
When an estate’s total assets exceed certain thresholds, life insurance proceeds can push the estate into higher tax exposure if held directly by the insured. Placing a policy in an ILIT can help remove those proceeds from estate calculations when done with appropriate timing. This strategy supports wealth preservation across generations, but it requires careful attention to timing, funding, and trust formalities to ensure the benefits are realized under current tax rules and applicable lookback periods.
An ILIT can provide managed distributions for minor children or relatives with vulnerabilities by specifying age-based distributions, education allowances, or lifetime maintenance provisions. The trust structure allows a trustee to manage funds responsibly on behalf of beneficiaries who may not be ready to handle large sums. This arrangement helps ensure that funds are used for intended purposes such as education, housing, or long-term care, while limiting the risk of rapid depletion or mismanagement by inexperienced beneficiaries.
Business owners sometimes use ILITs to hold life insurance that funds buy-sell agreements, provides liquidity for payment of estate taxes, or supports business continuity after an owner’s death. By separating insurance proceeds from the owner’s personal estate, the ILIT can provide a predictable source of funds for successors or heirs without subjecting the assets to probate. Proper coordination with corporate documents and buy-sell arrangements helps ensure proceeds are available when needed and used according to the owner’s business succession plan.
The Law Offices of Robert P. Bergman offers local support for clients in Willows and surrounding Glenn County communities seeking to establish or administer an ILIT. We help guide clients through document drafting, funding strategies, trustee selection, and post-death administration tasks. Our team assists with coordinating the ILIT alongside other important documents such as revocable living trusts, wills, powers of attorney, HIPAA authorizations, and guardianship nominations so that each element of a client’s plan works together smoothly and consistently across legal requirements and family objectives.
Clients choose the Law Offices of Robert P. Bergman for careful, client-centered planning that focuses on clarity and long-term results. We prioritize open communication, thorough document drafting, and attention to administrative details that affect the practical operation of trusts. Our services include tailored trust drafting, assistance with funding life insurance policies, coordination with other estate planning documents, and guidance for trustees to help ensure smooth trust administration when the time comes.
We also provide practical support around tax and gifting considerations relevant to ILITs, helping clients understand implications for gift tax exclusions, the three-year lookback rule, and interactions with retirement accounts and other assets. Our goal is to craft a plan that aligns with family objectives, minimizes unintended consequences, and offers clear instructions for fiduciaries and beneficiaries. We also help prepare successor trustees and provide guidance on recordkeeping and compliance matters to preserve the trust’s intended benefits.
Our firm serves clients throughout California, offering individualized attention for each family’s situation and clear guidance through each step of trust creation and administration. Whether you are establishing a new ILIT, transferring an existing policy, or reviewing trust provisions as part of a broader estate plan, we provide practical counsel and hands-on assistance to help protect and allocate assets as intended. Clients receive straightforward recommendations and support for implementing durable, cohesive estate plans.
Our process begins with a thorough information-gathering session to understand family dynamics, assets, and planning goals. We then draft a trust document tailored to those goals, propose trustee and beneficiary arrangements, and advise on funding options for the life insurance policy. Once documents are finalized, we assist with policy transfers or trust purchases and advise on gifting strategies to cover premiums. We also prepare trustees for ongoing administration tasks and provide post-death support for claims, distributions, and tax filings.
The first step focuses on understanding the client’s objectives, inventorying assets, and discussing family considerations that shape trust provisions. We review existing insurance policies, retirement accounts, wills, and powers of attorney to identify coordination needs. This stage involves explaining legal and tax implications of ILITs, possible funding mechanisms, and timing considerations such as the three-year rule that can affect estate inclusion. Clients leave with a clear plan for moving forward and an outline of possible trust provisions and trustee options.
We collect detailed information about existing life insurance policies, ownership designations, beneficiary designations, and other estate planning documents. A comprehensive asset review helps determine whether an existing policy should be transferred to an ILIT or whether a new policy should be issued in the trust’s name. We also examine retirement accounts, business interests, and other assets that interact with insurance planning. This thorough inventory ensures the ILIT is structured to achieve intended outcomes and coordinates with the client’s broader estate plan.
During planning, we discuss suitable trustees, successor trustee provisions, and detailed trust terms governing distributions, premium payments, and administrative powers. We consider whether individual trustees, corporate trustees, or co-trustee arrangements best fit the family’s needs, and draft clear clauses for trustee duties and decision-making authority. Clients are guided through the implications of various distribution standards and contingencies, ensuring the trust’s language aligns with their objectives and provides practical guidance for trustees and beneficiaries.
After planning, we prepare the trust document and related instruments, coordinate the transfer or purchase of the insurance policy, and establish funding mechanisms for premium payments. This step includes reviewing policy terms, updating ownership and beneficiary designations where needed, and documenting any gifts made to the trust to support premiums. Careful attention to timing and paperwork at this stage is essential to maintain desired tax treatment and to ensure the trust is properly established and funded for future administration.
We draft the ILIT agreement with precise provisions governing trustee powers, beneficiary distributions, premium payment procedures, and successor trustee arrangements. The document is reviewed with the client for clarity and to ensure it reflects family goals and contingency plans. Clients receive an explanation of each major clause, including instructions for recordkeeping and trustee reporting, so they understand how the trust will operate and how trustees will be expected to act after the grantor’s death.
This phase addresses whether an existing life insurance policy is transferred to the trust or whether a new policy is issued in the ILIT’s name. We handle the necessary forms and communications with insurers and create a plan for funding ongoing premiums, which may include annual gifts to the trust or other funding arrangements. Proper documentation of transfers and gifts is maintained to support the trust’s tax position and to demonstrate compliance with relevant rules and lookback periods.
Once the trust is in place and funded, trustees must administer it according to the trust terms and applicable law. Administration tasks include maintaining records, managing any trust-held funds, making distributions consistent with instructions, and preparing tax filings. After the insured’s death, trustees coordinate with insurers to collect proceeds, follow distribution provisions, and handle any required reporting or payments. Our firm assists trustees during administration and provides support for complex post-death matters and beneficiary communications.
Trustees should maintain accurate records of premium payments, gifts, trust communications, investments, and distributions, and keep beneficiaries informed as appropriate. Good recordkeeping and transparent procedures help avoid disputes and support the trust’s position with respect to tax and creditor matters. Trustees should also review insurance terms periodically and coordinate with financial advisors to ensure the trust’s assets are managed in line with the document’s objectives and changing circumstances.
When the insured dies, the trustee typically files claims with the insurer, collects proceeds, and administers distributions according to the trust. Trustees may also address creditor claims, tax filings, and communications with beneficiaries. Proper documentation of the trust’s funding and premium payments can be important during this phase. Our firm assists with claims processing, tax return preparation, and any litigation or disputes that arise, helping trustees follow the trust terms efficiently while protecting beneficiaries’ interests.
An Irrevocable Life Insurance Trust is a trust that owns a life insurance policy, with the trust document specifying how proceeds are handled and distributed after the insured’s death. Because the policy is owned by the trust and not by the insured, the death benefit may be excluded from the insured’s probate estate when the trust is properly funded and maintained. The ILIT is used to direct proceeds, provide for beneficiaries under specified terms, and coordinate with other estate planning instruments to achieve specific goals. The trust agreement names trustees and beneficiaries and spells out distribution standards and administrative duties. The ILIT’s structure allows for control over funds after death, such as age-based distributions, educational provisions, or support directives, reducing the likelihood that beneficiaries will receive large lump sums without guidance. The trust’s terms can also provide for payments to cover estate liquidity needs or charitable gifts. Proper setup requires attention to timing, funding, and documentation so that the intended tax and asset protection benefits are preserved for heirs and fiduciaries during trust administration.
Transferring a life insurance policy into an ILIT can remove the death benefit from the insurer’s owner’s taxable estate, which may reduce estate tax exposure when certain conditions and timing rules are satisfied. If the policy is owned by the trust at death, the proceeds generally are not included in the insured’s estate for estate tax purposes, provided the transfer was not within specified lookback periods and the trust is properly structured and administered. The specifics depend on federal and state tax rules as they apply to an individual’s overall estate. Tax planning with an ILIT often involves considering gift tax implications, the annual gift tax exclusion, and whether the grantor will make gifts to the trust to cover premiums. Because tax law can be complex and timing-sensitive, careful documentation and regular review are important. Planning also considers the interaction of the ILIT with other assets and designated beneficiaries to ensure overall estate objectives are met while preserving tax benefits where possible.
One downside of an ILIT is its irrevocable nature, which limits the grantor’s ability to change the trust or reclaim the policy once the trust is properly funded. This reduced flexibility means that circumstances such as changes in family composition, financial needs, or tax law can create challenges if the trust terms no longer align with the grantor’s objectives. It is important to anticipate potential future needs and include contingency provisions where possible. Proper planning and periodic reviews help mitigate unexpected issues and ensure the trust remains relevant given changing circumstances. Another risk involves administrative requirements and potential missteps that could undermine the intended benefits, such as failing to document premium gifts, transferring a policy too close to the date of death, or not following trust formalities. Trustees must carry out duties accurately to preserve protections. For these reasons, careful drafting, timely funding, and good recordkeeping are essential components of a successful ILIT plan and help avoid unintended inclusion of proceeds in the taxable estate.
Yes. An ILIT can be tailored to benefit a spouse, children, grandchildren, charities, or specific individuals through clearly drafted distribution provisions. For spouses, an ILIT can provide income or principal distributions, though planning should account for any community property implications or survivor rights under state law. For children and grandchildren, trusts can include age-based distribution schedules, educational allowances, and protections for beneficiaries with special needs. Charitable beneficiaries can also be named directly or through directed gifts, allowing the grantor to pursue philanthropic objectives as part of a larger legacy plan. When structuring distributions, it is important to consider contingencies, such as alternate beneficiaries and procedures if a named beneficiary predeceases the insured. Trustees need clear guidance on how discretionary distributions should be made and on any restrictions intended to protect benefits against creditors or divorce. Good coordination with other estate documents ensures the ILIT’s provisions work harmoniously with wills, revocable trusts, and beneficiary designations.
Once a life insurance policy is owned by the ILIT, the trust must have a mechanism to cover premium payments. Common approaches include the grantor making annual gifts to the trust that trustees then use to pay premiums, or the trust holding assets or a separate funding arrangement dedicated to premium obligations. Gifts may be structured to utilize the annual gift tax exclusion to minimize gift tax consequences, and careful documentation of each gift is essential to support tax positions. The trust document should include explicit instructions for premium payment procedures to avoid confusion. Trustees are responsible for managing trust funds and ensuring premiums are paid on time to keep the policy in force. Failure to make timely payments can lapse the policy, potentially undermining the trust’s objectives. Good bookkeeping and communication between the grantor and trustee during the trust’s administration help maintain funding continuity and reduce the risk of inadvertent policy termination or administrative disputes.
The three-year lookback rule refers to a period during which transfers of life insurance policies or ownership changes made by the grantor may still be considered part of the grantor’s estate for tax purposes if death occurs within three years of the transfer. This rule can affect whether life insurance proceeds are includable in the taxable estate. Proper planning considers this timing constraint, either by making transfers early enough to avoid inclusion or by structuring arrangements to account for the lookback period. Understanding this rule helps clients make informed timing decisions when funding an ILIT. Because the lookback rule can have significant tax implications, it is important to plan transfers well in advance of anticipated need or to consider other measures that align with the grantor’s timeline and objectives. Documenting transfers and maintaining clear records helps clarify the trust’s tax position. Clients should review the timing of transfers in light of personal health and financial considerations and seek guidance to manage potential estate inclusion risks created by recent transfers.
A trustee should be someone or an entity capable of managing administrative duties, keeping accurate records, and communicating with beneficiaries. Trustees can be trusted family members, friends, a professional fiduciary, or a corporate trustee, depending on the family’s needs and complexity of the trust. The key is selecting a person or institution that understands fiduciary responsibilities and is willing to follow the trust’s terms and applicable legal requirements. Consider naming successor trustees to ensure continuity if the primary trustee cannot serve. Trustee responsibilities include maintaining records, paying premiums and expenses, investing trust assets prudently when applicable, making distributions per the trust’s instructions, and filing any necessary tax returns. Trustees should maintain transparency with beneficiaries and seek professional assistance when needed to fulfill tax, legal, or investment obligations. Clear trust provisions and documented procedures reduce uncertainty and help trustees carry out their duties effectively on behalf of beneficiaries.
An ILIT functions alongside other estate planning tools such as wills, revocable living trusts, powers of attorney, and healthcare directives. While a revocable trust and will address a broader set of assets and directions, the ILIT specifically addresses life insurance ownership and distribution. Coordination ensures beneficiary designations, trust terms, and pour-over wills do not conflict and that assets pass according to overall intentions. A pour-over will can complement a trust-based plan by directing any unallocated assets to the appropriate trust upon death. Integrating documents reduces the risk of inconsistent instructions that can create disputes or administrative delays. During planning, we review existing wills, living trusts, and beneficiary forms to align all instruments. This process clarifies how insurance proceeds should be treated in light of the broader estate plan and ensures that trustees and personal representatives have consistent guidance when handling assets and distributions after the grantor’s death.
An ILIT can provide a measure of protection for proceeds against certain creditor claims and divorce proceedings involving beneficiaries, because assets held in a properly drafted trust may not be directly owned by beneficiaries until distributions are made. The trust’s distribution terms and spendthrift or protective clauses can limit beneficiaries’ ability to transfer or encumber future interests, helping preserve funds for their intended use. This protective structure is one reason people use ILITs when concerned about creditors, spendthrift issues, or family law exposure. However, the degree of protection depends on trust language, state law, and the timing of transfers, and protection is not absolute in every circumstance. Trustees must administer distributions consistent with the trust terms, and courts may still review certain claims under specific circumstances. For families facing potential creditor or family law exposure, carefully crafted trust provisions and proper administration are essential components of an effective protective strategy.
For an initial ILIT discussion, bring documentation that helps evaluate current insurance and estate planning needs, including existing life insurance policies, beneficiary designations, wills, trusts, retirement account statements, and a summary of assets and liabilities. Information about family members, their ages, financial circumstances, and any special needs or concerns is also helpful. A list of objectives, such as tax minimization, creditor protection, or support for minors, will make the meeting more productive and focused on practical next steps. If you have previous estate planning documents, bring them so we can review how an ILIT fits with your existing plan. Also prepare questions about trustee selection, funding strategies, timing issues like the three-year rule, and how the ILIT coordinates with powers of attorney and health care directives. That preparation helps ensure the initial meeting yields a clear plan and an outline of the drafting and funding steps required to implement an ILIT effectively.
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