An irrevocable life insurance trust (ILIT) is a planning tool used to hold life insurance policies outside of a taxable estate, with the aim of preserving proceeds for beneficiaries and addressing estate tax concerns. At the Law Offices of Robert P. Bergman, we provide thoughtful planning that reflects client objectives and California law. An ILIT requires careful drafting to set ownership, funding, trustee duties, and distribution terms while avoiding unintended tax or probate consequences. This introduction explains the role an ILIT can play in a broader estate plan and outlines common considerations for individuals in Lynwood and throughout Los Angeles County who want long-term asset protection.
Setting up an ILIT involves complex choices about policy ownership, gift tax considerations, and trustee powers, and it often connects to documents such as a pour-over will, certification of trust, and powers of attorney. Clients frequently combine an ILIT with other trust instruments like revocable living trusts or retirement plan trusts to align retirement benefits and insured proceeds with overall goals. This overview highlights how an ILIT fits into estate planning in California, what to expect during the planning process, and key steps you can take now to protect family resources and reduce administration burdens after a death.
An ILIT can preserve life insurance proceeds for intended recipients by removing the policy from a taxable estate, which may minimize estate settlement complications and help provide liquidity for taxes or debts. It creates a clear mechanism for distributing proceeds according to the grantor’s wishes, which is especially useful for blended families, beneficiaries with special needs, or those who prefer staged distributions. An effective ILIT also supports creditor protection in many situations and can coordinate with retirement plans and other trusts. Proper funding and trustee selection are essential to realizing these benefits while complying with California and federal tax rules.
The Law Offices of Robert P. Bergman serves clients across Los Angeles County with estate planning services tailored to the needs of individuals and families, including drafting of irrevocable life insurance trusts and related documents. The firm emphasizes clear communication, careful document drafting, and practical solutions that reflect California law and family dynamics. Our approach is centered on listening to client goals, evaluating assets such as life insurance and retirement accounts, and assembling cohesive plans that reduce administrative burdens. We are available to discuss trustee selection, policy assignments, and funding strategies to help clients pursue reliable outcomes for beneficiaries.
An ILIT is a trust that owns life insurance policies on the grantor’s life, removing the insurance proceeds from the grantor’s estate for tax purposes when properly structured. The trust holds the policy and receives proceeds upon the insured’s death, distributing funds according to the trust terms rather than through probate. This structure can provide liquidity for paying estate taxes or debts, fund legacy gifts, and protect proceeds from direct creditor claims in many circumstances. Proper timing, funding, and drafting are important to ensure the ILIT functions as intended and meets the grantor’s planning objectives under California and federal rules.
Creating an ILIT typically involves naming trustees and beneficiaries, transferring ownership of an existing policy or having the trust buy a new policy, and establishing rules for gifts to the trust to cover premium payments. Trustees must manage the trust and comply with reporting and tax requirements. Because transfers within three years of death can have tax implications, planning ahead is often important. Coordinating the ILIT with other estate planning documents like wills, powers of attorney, health directives, and trust certificates ensures the plan operates smoothly and reflects the grantor’s intentions.
An ILIT is an irrevocable trust specifically created to own one or more life insurance policies, with the trust named as the owner and beneficiary of the policy. By placing ownership in the trust, proceeds are generally not included in the grantor’s taxable estate, which can reduce estate tax exposure and avoid probate administration for those proceeds. The trust document sets the terms for distribution, such as lump sums, staged distributions, or trustee discretion for support and maintenance. Trustees handle premium payments, claims, and distributions, following the trust terms and the applicable laws in California and at the federal level.
Important elements of an ILIT include clear trust language, designation of trustee and successor trustees, specification of beneficiaries, transfer or purchase mechanisms for the insurance policy, and funding provisions for premiums. The process typically starts with assessing insurance needs, drafting trust documents, transferring ownership or causing the trust to acquire a new policy, and establishing a funding plan to pay premiums. Trustees must maintain records and follow trust administration rules. Coordination with estate tax planning and beneficiary designations on retirement accounts helps prevent conflicts and preserve intended results for heirs.
A clear understanding of common terms such as grantor, trustee, beneficiary, premium funding, and incidence of ownership helps when establishing or reviewing an ILIT. Knowing how transfers, gift taxes, and the three-year rule interact with ownership changes is essential, as is understanding how trustee powers are limited or expanded by the trust document. This glossary section defines practical concepts and explains their role in trust administration under California and federal law, so you can be confident the ILIT aligns with broader estate planning objectives.
The grantor is the person who creates the ILIT and typically transfers a life insurance policy or arranges for the trust to acquire one. Once the trust is created and the policy is transferred into trust ownership, the grantor generally no longer controls the policy directly. The grantor may make gifts to the trust to cover premium payments, and these gifts can have gift tax consequences that should be considered and managed through appropriate planning steps consistent with federal and California rules. Understanding the grantor’s role is essential when coordinating the ILIT with other planning tools.
The trustee is the individual or institution appointed to manage the ILIT, pay premiums if funds are available, make distributions to beneficiaries in accordance with the trust terms, and handle insurance claims when proceeds are payable. Trustees owe fiduciary duties and must maintain accurate records, follow the trust document, and consider the grantor’s stated objectives. Selecting a trustee who will carry out administrative duties reliably and communicate with beneficiaries is an important decision in making an ILIT effective and practical over time.
A beneficiary is a person or entity designated to receive trust distributions when life insurance proceeds are paid into the ILIT. The trust document controls how and when beneficiaries receive proceeds, which can be immediate lump sums, staggered payments, or payments at the trustee’s discretion for health, education, maintenance, and support. Designating contingent beneficiaries and planning for special circumstances, such as minors or beneficiaries with disabilities, helps preserve the grantor’s intentions and provides clear guidance to the trustee after a death.
The three-year rule can cause a life insurance policy transferred to an ILIT within three years of death to be included in the grantor’s estate for tax purposes. To avoid this outcome, many grantors transfer ownership well in advance and coordinate premium funding and gift tax procedures carefully. Funding the trust to cover premiums often involves annual gifting or other strategies to ensure the trustee can maintain the policy. Understanding timing, recordkeeping, and gift tax rules is important for achieving the intended estate planning benefits.
When planning for life insurance within an estate plan, individuals can choose between holding a policy personally, naming direct beneficiaries, or placing the policy in a trust such as an ILIT. Holding a policy personally may be simpler but can expose proceeds to estate inclusion and probate oversight. Naming beneficiaries directly is common, but lacks the control an ILIT provides for staged distributions or needs-based distributions. An ILIT offers boundaries and administration by a trustee, which can protect proceeds for intended purposes while aligning distributions with a grantor’s long-term goals. The optimal approach depends on family circumstances, tax considerations, and desired control over proceeds.
A limited approach, such as keeping a policy outside of a trust and naming beneficiaries directly, may be appropriate when policy proceeds are modest and the grantor prefers simplicity in administration. If estate tax exposure is unlikely and beneficiaries are financially capable of managing an inheritance, the additional complexity of an ILIT may not be necessary. In such situations, ensuring beneficiary designations are up to date and coordinating with a will or revocable trust can achieve most planning objectives without creating extra administrative steps or trustee responsibilities after a death.
When beneficiaries are clearly identified and have no anticipated need for managed distributions, and when the estate is small enough that estate tax exposure is unlikely, maintaining a straightforward beneficiary designation may be sensible. This approach reduces paperwork and ongoing trust administration. However, even in these cases it is advisable to review overall planning documents to confirm beneficiary designations align with the rest of the estate plan and address issues such as minor beneficiaries, creditor concerns, or potential conflicts among heirs to prevent disputes and ensure proceeds reach the intended recipients.
Comprehensive planning is often necessary when families have blended structures, minor children, or beneficiaries with special needs, because an ILIT can be crafted to provide for unique distribution schedules and safeguards. Additionally, when estate values approach thresholds where estate tax exposure is possible, integrating an ILIT into a larger plan that includes revocable trusts, retirement plan trusts, and proper beneficiary designations can help manage liquidity and tax outcomes. Thorough planning reduces the risk of unintended distributions and administrative delays while supporting the grantor’s broader legacy objectives.
A comprehensive approach ensures the ILIT coordinates with other elements like pour-over wills, retirement plan trusts, and durable powers of attorney to prevent conflicts and unintended tax consequences. Misalignment between beneficiary designations on retirement accounts and trust provisions can create complications and tax inefficiencies. By addressing these matters together, clients can reduce administrative burdens, protect retiree benefits, and create a cohesive plan that clarifies the interplay of insurance proceeds with estate liquidity needs and distributions to beneficiaries in accordance with California law.
A comprehensive approach aligns life insurance planning with overall estate goals, helping ensure that proceeds serve intended purposes such as covering taxes, supporting surviving family members, or funding charitable gifts. Coordination prevents conflicts between beneficiary designations and trust provisions, provides mechanisms for staged or conditional distributions, and may reduce the estate’s tax exposure when combined with other planning tools. Thoughtful drafting of trustee powers and distribution standards helps avoid disputes and provides clear guidance for administration after a death, supporting more predictable and orderly asset transfer.
Comprehensive planning can also enhance liquidity management, as life insurance proceeds held in trust are often available quickly to pay estate settlement expenses or debts. The ILIT structure can assist with legacy preservation by directing funds for long-term family needs and protecting proceeds from personal creditor claims in many circumstances. Additionally, the trust document can address contingencies such as beneficiary incapacity or creditor issues, providing practical protections that honor the grantor’s intentions and improve outcomes for heirs under California law.
An ILIT can ensure life insurance proceeds are applied exactly as the grantor intends, whether for income replacement, education funding, debt repayment, or charitable gifts. By holding the policy in trust, distributions are governed by the trust terms instead of beneficiary heirs acting alone, which can prevent dissipation and ensure long-term objectives are met. Clear instructions in the trust document and careful trustee selection support consistent administration and preserve assets for future needs, which is especially important for families seeking to maintain a legacy across generations.
By placing a policy into an ILIT, proceeds typically avoid probate court oversight for that asset, which can expedite distributions, reduce public disclosure of the payout, and limit estate administration tasks. This structure supports a more private settlement process and lowers the administrative load placed on family members during a difficult time. Trust administration under an ILIT is governed by the trust terms and applicable statutes, allowing for efficient handling of claims and distributions that reflects the grantor’s intentions and reduces uncertainty for those left behind.
Begin ILIT planning well in advance of expected policy needs to avoid timing pitfalls such as the three-year transfer rule and to allow for orderly funding of premium payments. Early planning provides time to evaluate whether to transfer an existing policy into the trust or to have the trust acquire a new policy, and it helps align beneficiary designations across all accounts. Discuss trustee selection and successor trustees early so that the structure supports long-term administration and avoids rushed decisions that could complicate future distributions or trigger unintended tax results under federal or California rules.
Select trustees who are capable of managing trust administration tasks such as paying premiums, maintaining records, filing necessary tax information, and making prudent distribution decisions. Consider naming successor trustees and clear guidance in the trust document to address succession and potential conflicts. Trustees should understand their fiduciary duties and the practical responsibilities involved with an ILIT, including the need to communicate with beneficiaries and coordinate with other fiduciaries associated with the estate. Thoughtful trustee choices support reliable administration and better outcomes for beneficiaries.
Consider an ILIT if you want life insurance proceeds to be managed and distributed according to specific terms rather than passed directly to beneficiaries, or if you seek to remove policy proceeds from your taxable estate. An ILIT can also provide liquidity to pay estate settlement costs, protect proceeds from creditor claims in many situations, and preserve assets for long-term needs such as education or family support. Families with complex dynamics, significant assets, or a desire for structured distributions often find ILITs useful as part of a broader estate plan that includes wills, trusts, and powers of attorney.
You may also consider an ILIT when coordinating life insurance with retirement accounts, business succession plans, or legacy gifts to charity. An ILIT gives you control over timing and conditions of distributions and can reduce administrative exposure through probate. The planning process involves evaluating tax implications, funding needs, trustee duties, and interactions with other documents. Taking a deliberate approach helps ensure the plan aligns with family circumstances and long-term financial goals while complying with relevant California and federal requirements.
Typical circumstances that prompt consideration of an ILIT include significant estate values that could face estate tax exposure, blended family dynamics where controlled distributions are desired, beneficiaries who are minors or have special needs, and situations where liquidity is needed to settle debts or taxes. Business owners may also use ILITs in succession planning to provide buyout liquidity or to preserve business continuity. Each situation requires tailored drafting and coordination with the rest of the estate plan to ensure policy proceeds achieve the intended result under California law.
Blended families often benefit from an ILIT because it can ensure an insured benefit is preserved for children from a prior relationship while also providing lifetime support for a surviving spouse. The trust can specify distribution timing and conditions, preventing unanticipated disbursements and protecting the legacy intended for specific family members. Careful drafting determines whether distributions occur in lump sums or installments, and whether funds may be used for certain purposes, which helps reconcile competing family interests while honoring the grantor’s wishes.
When estates include illiquid assets such as real estate or closely held businesses, an ILIT can provide immediate liquidity that helps pay estate settlement costs, taxes, and debts without forcing a sale of important assets. Having insurance proceeds available in trust affords administrators the flexibility to meet obligations promptly, minimizing pressure to liquidate long-term holdings. Planning ahead ensures that the trust is funded and that trustee instructions enable timely access to funds for necessary estate administration expenses.
If beneficiaries are minors, have disabilities, or face creditor exposure, an ILIT can provide protections by placing proceeds under trust management with tailored distribution rules. The trust can include provisions for trustee discretion to provide for health, education, maintenance, and support while avoiding outright distributions that might harm a beneficiary’s eligibility for public benefits. Thoughtful drafting ensures funds are used for the beneficiary’s long-term welfare while preserving flexibility to address changing needs over time.
We assist Lynwood residents with planning and drafting irrevocable life insurance trusts and related documents to ensure policy proceeds are managed and distributed according to individual goals. Our practice focuses on coordinating ILITs with trust portfolios, pour-over wills, powers of attorney, and beneficiary designations to create cohesive plans that reduce administrative burdens. Clear communication during the planning process helps clients understand timing, funding requirements, and trustee responsibilities so families can make informed choices. For assistance in Lynwood and surrounding Los Angeles County communities, call 408-528-2827 to discuss your situation.
The Law Offices of Robert P. Bergman assists clients with practical estate planning, including drafting irrevocable life insurance trusts and coordinating them with other estate planning documents. We emphasize clear drafting and thorough review of beneficiary designations, trust funding, and trustee duties to help align the ILIT with overall family and financial goals. Our firm focuses on delivering reliable service and timely communication to guide clients through the decisions required for establishing and funding an ILIT under California law and within the federal tax framework.
Clients rely on our careful approach to document preparation and plan coordination, including pour-over wills, revocable living trusts, retirement plan trusts, and related authorizations like HIPAA releases. We assist with transferring ownership or implementing trust purchases, explaining the timing issues associated with transfers, and advising on funding strategies for premiums. The goal is to help clients achieve clarity and predictable outcomes for beneficiaries while minimizing administration delays and potential tax pitfalls through thoughtful planning decisions.
We also help trustees and families understand ongoing trust administration responsibilities, including premium payments, recordkeeping, and claims procedures after a death. By providing practical guidance and drafting clear trust provisions, we support trustees in carrying out duties efficiently and beneficiaries in receiving intended benefits. Our office serves clients in Lynwood and the broader Los Angeles area, and we are available to discuss trustee selection, successor arrangements, and how an ILIT can integrate into your estate plan.
Our legal process for ILIT planning begins with a focused consultation to understand your goals, family dynamics, policy holdings, and estate planning needs. We then evaluate whether transferring an existing policy to a trust or having the trust acquire a new policy best fits those goals, discuss tax and timing considerations, and draft trust documents and related estate planning instruments. After client review and execution, we assist with transferring policy ownership, establishing funding mechanisms for premiums, and outlining trustee responsibilities to ensure the ILIT operates as intended over time.
The first step is a comprehensive assessment of your assets, current life insurance policies, beneficiary designations, and overall estate planning objectives to determine if an ILIT is appropriate and how it should be structured. We examine tax implications, timing issues like the three-year rule, and how the ILIT should coordinate with existing trusts, wills, and retirement account designations. This stage clarifies goals, identifies potential pitfalls, and establishes a customized strategy to move forward with drafting and funding decisions.
During the initial meeting we review current life insurance policies, beneficiaries, and any related trust documents to understand the starting point for ILIT planning. We discuss your objectives for proceeds, whether liquidity for estate costs is needed, whether distributions should be staged, and whether beneficiaries require protection. This review helps determine whether to transfer an existing policy into a trust or to issue a new policy owned by the trust and establishes the groundwork for a drafting plan that reflects your intentions.
We analyze timing issues such as the three-year inclusion rule and gift tax consequences of premium funding, which can affect whether and when to transfer a policy. Understanding these tax and timing implications early enables us to recommend approaches that align with your financial picture and estate planning priorities. We also discuss trustee roles, potential funding sources for premiums, and how the ILIT fits with broader estate planning instruments so the final documents avoid unintended consequences and achieve clear administration instructions.
Once the strategy is confirmed, we draft the ILIT document tailored to your goals, including trustee powers, distribution rules, and provisions addressing contingencies. We coordinate execution of the trust, assist with assigning or issuing the life insurance policy to the trust, and prepare any supporting documents such as certification of trust, pour-over wills, and funding instructions. Clear drafting and careful review help ensure the ILIT functions as intended and aligns with all relevant beneficiary designations and trust arrangements.
We include specific language to address the timing and manner of distributions, trustee discretion where appropriate, and instructions for paying premiums and handling claims. The trust document also names successor trustees and provides guidelines for recordkeeping and reporting. These provisions are designed to reduce ambiguity in administration and to streamline trustee actions, improving the likelihood that proceeds will be distributed efficiently and in accordance with the grantor’s intentions at the time of drafting.
After the trust is signed, we handle the administrative steps to transfer policy ownership or to arrange for the trust to acquire a new policy, including working with insurers to update ownership and beneficiary designations. We document gifts for premium payments if needed and provide guidance on establishing a funding plan for ongoing premiums. Proper execution and timely completion of these steps are important to ensure the ILIT achieves its intended tax and administration outcomes.
Following trust execution, trustees may need support with premium payments, recordkeeping, and claims processing after a death. Our firm assists by providing guidance on trustee responsibilities, preparing necessary trust records such as certification of trust, and coordinating with other advisors when required. We can also help update planning documents over time to reflect changes in family circumstances or laws, ensuring the ILIT continues to serve the grantor’s objectives and operates smoothly in coordination with the estate plan.
Trustees must maintain accurate records of premium payments, gifts to the trust, and communications with beneficiaries, and they should follow the trust provisions when making distributions. We provide practical guidance on required documentation, tax reporting responsibilities, and how to handle interactions with the insurer and beneficiaries. Clear recordkeeping and adherence to the trust’s instructions help prevent disputes and support efficient claims handling when life insurance proceeds become payable.
Although an ILIT is irrevocable, associated planning documents like pour-over wills, powers of attorney, and revocable trusts may require periodic review to maintain consistent coordination with the ILIT. We recommend periodic reviews when family or financial circumstances change so that beneficiary designations and supporting documents remain aligned. While the ILIT itself cannot be changed easily, reviewing related instruments ensures the broader estate plan continues to reflect current intentions and practical needs.
An irrevocable life insurance trust is a trust that holds a life insurance policy and is designed to keep the policy proceeds out of the insured’s taxable estate when correctly structured. The trust owns the policy, receives proceeds at death, and distributes funds to beneficiaries according to the trust terms. People use ILITs to provide liquidity, direct distributions, and reduce probate administration for insurance proceeds. The trust document specifies trustee duties, distribution timing, and successor provisions to match the grantor’s objectives while complying with applicable laws. ILITs are often part of a larger estate plan and require careful coordination with wills, revocable trusts, and beneficiary designations on retirement accounts. Because the trust is irrevocable, decisions about trustee selection and funding should be made thoughtfully. Proper implementation includes transferring ownership or having the trust purchase a policy, establishing a funding plan for premiums, and documenting gifts to the trust when necessary. Planning early helps avoid timing issues that could affect the intended tax outcome.
When an ILIT is properly established and funded, the life insurance proceeds held by the ILIT are generally not counted as part of the grantor’s taxable estate, which can reduce estate tax exposure. This advantage depends on correct transfer timing, documentary evidence, and compliance with federal estate tax rules. In California, where there is no separate state estate tax for most estates, federal rules are often the primary consideration for larger estates. Coordination with an overall estate plan helps determine whether an ILIT will provide meaningful tax benefits. Timing and transfer rules are important to realize potential tax benefits. Transfers within certain windows before death may be treated differently for estate tax purposes, so planning ahead is key. Proper documentation of transfers, gifts to fund premiums, and trust administration records are important to support the intended tax treatment and to reduce the risk of unintended inclusion of policy proceeds in the taxable estate.
Choosing a trustee involves balancing practical administrative skills with an understanding of fiduciary responsibilities. Trustees must pay premiums, maintain records, handle insurer communications, and make distributions in accordance with the trust. Some people name a trusted family member or friend who is organized and reliable, while others select a corporate trustee for continuity and professional administration. It is helpful to name successor trustees to address future changes and ensure continuity of administration. Whomever you select should be willing and able to fulfill the duties required, including recordkeeping and potential tax reporting. Clear instructions in the trust document about trustee powers and distribution standards reduce ambiguity and help trustees act confidently. Discussing these duties with potential trustees in advance ensures they understand the responsibilities and can plan for succession if necessary.
The three-year rule refers to a federal estate tax provision that may cause life insurance policies transferred within three years of the insured’s death to be included in the insured’s estate. This can undermine the intended tax benefits of an ILIT if transfers occur too close to death. To avoid this outcome, many individuals transfer ownership well in advance of anticipated needs or have the trust purchase a new policy so that the three-year window is not an issue. Because the timing of transfers matters, early planning and careful documentation are critical. Reviewing the timing of transfers in light of health changes and financial circumstances helps ensure the ILIT operates as intended. If a transfer occurs within the three-year period, consultation is needed to understand potential tax consequences and alternative planning steps that may still achieve some objectives.
Premiums for a policy owned by an ILIT are typically paid from trust funds. The grantor can make annual gifts to trust beneficiaries who then pass those funds to the trustee under a Crummey or similar withdrawal right, or the grantor can make direct gifts into the trust specifically for premium payments. Proper procedures and documentation are necessary to create the desired gift tax treatment and to provide the trustee with funds to maintain the policy. Establishing a funding plan in advance reduces the risk that the trustee will be unable to pay premiums, which could lead to policy lapse. Detailed recordkeeping and consultation with financial advisors help ensure gifts are made and recorded correctly so the trust can continue to hold the policy and receive the intended benefits for beneficiaries under the trust terms.
An ILIT can provide a degree of protection for insurance proceeds because funds held in trust are generally not owned directly by beneficiaries and therefore may be less vulnerable to certain creditor claims. The level of protection depends on the trust terms, the nature of the beneficiaries’ creditor claims, and applicable state law. Using trust distribution standards and restricting outright distributions can help preserve proceeds for intended purposes and limit exposure to personal creditors in many cases. However, absolute protection cannot be guaranteed in every situation, and certain creditor claims or fraudulent transfer challenges can affect trust assets. Careful drafting that considers potential future claims and compliance with relevant transfer statutes helps maximize protection. Periodic review ensures that the trust structure remains appropriate as circumstances and laws evolve.
An ILIT should be coordinated with retirement account beneficiary designations, because inconsistent designations can create conflicts that undermine planning goals. Retirement accounts and pensions often bypass trusts and transfer directly to named beneficiaries, so aligning these designations with the ILIT or other trust instruments is essential to achieving a cohesive plan. When retirement account proceeds are significant, integrating their disposition with the ILIT and related documents helps manage tax and distribution goals. Coordination also includes reviewing pour-over wills, revocable trusts, and powers of attorney to ensure the overall estate plan reflects current intentions. Regular reviews and updates to beneficiary forms and trust documents help prevent unintended outcomes and provide a consistent roadmap for distribution of all assets, including insurance and retirement accounts, upon the grantor’s death.
After the insured person dies, the trustee files a claim with the life insurance company and receives the proceeds on behalf of the trust. The trustee then distributes proceeds according to the trust terms, which may provide for immediate lump sum distributions, staged payments over time, or trustee discretion to provide for beneficiary needs. Trustees must follow the trust instructions, maintain records of distributions, and communicate with beneficiaries about the administration process and timing. Trust administration may also involve coordinating with other estate administration steps such as paying debts, filing taxes, and communicating with heirs. Clear documentation and transparent communication help reduce tensions and facilitate an orderly distribution process. The trustee’s responsibilities continue until final distributions are complete and trust administration concludes in accordance with the trust document.
Yes, an ILIT can be structured to provide for minors or beneficiaries with special needs by specifying tailored distribution rules and trustee discretion for health, education, maintenance, and support. The trust can direct how funds are used and whether distributions are to be made for particular purposes, protecting assets that might otherwise be misused or jeopardize eligibility for public benefits. Including clear instructions and naming an appropriate trustee helps ensure funds are allocated responsibly for beneficiaries who need oversight. When beneficiaries have disabilities, special planning tools such as naming a supplemental needs trust in coordination with the ILIT may be appropriate to preserve eligibility for public benefits. Careful drafting addresses both benefit preservation and the beneficiary’s quality of life by allowing reasonable expenditures for supplemental needs without replacing governmental support. Professional guidance helps tailor provisions to meet both legal and practical needs.
The time to set up an ILIT and transfer a policy varies depending on whether an existing policy is being transferred or a new policy is being issued. Drafting the trust document and executing required forms can typically be completed within a few weeks, but transferring ownership and coordinating with insurers may take additional time depending on insurer procedures. If a trust purchases a new policy, underwriting by the insurer can add several weeks depending on medical and financial review requirements. Because of timing considerations such as the three-year rule and premium funding logistics, starting the process early is recommended. Planning ahead allows for careful structuring of gifts to the trust to fund premiums, accurate recordkeeping, and coordination of the trust with other estate planning documents, reducing the risk of unintended tax consequences and ensuring the ILIT functions as intended when proceeds become payable.
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