An Irrevocable Life Insurance Trust (ILIT) can be a powerful tool for managing life insurance proceeds, protecting family assets, and addressing potential estate tax concerns. At the Law Offices of Robert P. Bergman, we help clients in Pico Rivera and the surrounding Los Angeles County communities understand whether an ILIT fits their overall estate planning goals. This guide explains what an ILIT is, how it functions, the steps involved in creating and funding one, and common situations where an ILIT is used. We present practical information so you can make informed decisions about preserving wealth and providing for loved ones.
Choosing to create an ILIT involves careful coordination of insurance ownership, trust language, and gift tax considerations. Our approach centers on explaining options in clear terms and structuring documents that reflect each client’s circumstances. Whether you own a large life insurance policy, want to protect proceeds from estate inclusion, or aim to provide orderly distributions to beneficiaries, an ILIT may help achieve those goals. Contact the Law Offices of Robert P. Bergman to discuss how an ILIT might fit with your will, revocable trust, powers of attorney, and other estate planning documents for a cohesive plan tailored to your situation.
An ILIT is designed to remove life insurance proceeds from an individual’s taxable estate and provide a clear mechanism for distributing proceeds to beneficiaries according to the grantor’s wishes. By placing a life insurance policy in an irrevocable trust, the proceeds may avoid probate and be managed for beneficiaries by a trustee under terms you set. This arrangement can reduce estate administration delays, protect proceeds from potential creditor claims against the estate, and allow for controlled distributions to children, grandchildren, or others. For many families, an ILIT provides predictability and privacy that beneficiary designations alone cannot guarantee.
The Law Offices of Robert P. Bergman serves clients throughout California with practical, client-centered estate planning services. Our practice focuses on creating documents that address clients’ personal and financial circumstances, including revocable living trusts, wills, powers of attorney, and trusts such as ILITs. We aim to provide clear guidance about legal and tax considerations while preparing documents that are durable and manageable for families. Our team emphasizes responsive communication, careful drafting, and coordinated planning that aligns life insurance, retirement assets, and other components of an overall estate plan to reflect each client’s goals.
An Irrevocable Life Insurance Trust is a trust created to own one or more life insurance policies. Once the trust holds the policy, the grantor typically cannot change the ownership without tax and legal consequences, which is why the trust is described as irrevocable. The trust document names a trustee to manage the policy and provides instructions for distributing proceeds after the insured’s death. Because the policy is owned by the trust rather than the insured, the proceeds may not be included in the insured’s gross estate for estate tax purposes, depending on timing and transfers, making ILITs useful for managing large policies.
Setting up an ILIT requires careful attention to funding, gift tax implications, and how premiums will be paid. Typically the grantor makes gifts to the trust to cover premium payments, and these gifts may be structured to use the annual gift tax exclusion or other planning. Special language should address access to cash values, how beneficiaries receive proceeds, and qualifications for distribution. Because ILITs are intended to be permanent arrangements, document language and ecosystem coordination with wills, revocable trusts, and beneficiary designations are critical so that the overall estate plan functions as intended.
An ILIT is a legal entity created by a trust agreement in which a grantor transfers an existing policy or the trust purchases a policy on the grantor’s life. Once formed, the trust holds title to the policy, the trustee manages premium payments and policy matters, and beneficiaries receive proceeds according to trust terms. The primary goals include minimizing inclusion of life insurance proceeds in the grantor’s estate, providing structured distributions, and offering administrative control after the grantor’s death. Drafting must consider three-year rules and other transfer timing to achieve the desired tax and probate results.
Creating an ILIT commonly includes drafting the trust agreement, appointing one or more trustees, transferring policy ownership to the trust or having the trust acquire a new policy, and arranging funding for premiums. The trust should specify distribution rules, successor trustees, and trustee powers for investment and administration. Administering the trust means the trustee keeps records of gifts used to pay premiums, provides required notices to beneficiaries when necessary, and acts on claims when the insured passes away. Coordination with tax advisors and careful timing help avoid unintended tax inclusion of the proceeds.
This glossary highlights common terms used in ILIT planning to help demystify the process. Understanding terms such as grantor, trustee, beneficiary, gift tax exclusion, and premium funding will make it easier to review documents and discuss planning choices. Familiarity with these terms supports better decision-making when choosing trustees, funding approaches, and distribution provisions. Clear definitions also help in conversations with financial and tax advisors so that legal documents align with practical arrangements and intentions for life insurance ownership and legacy planning.
The grantor is the person who creates the trust and transfers assets, such as a life insurance policy, into the trust. In the ILIT context, the grantor is often also the insured whose life is covered by the policy. The grantor’s decisions determine the trust terms, beneficiaries, and funding strategy. Because the trust is irrevocable, the grantor typically relinquishes the right to modify or revoke the trust without consequences; this permanence is what can allow life insurance proceeds to be excluded from the grantor’s taxable estate when properly structured and timed.
An irrevocable trust is a trust that generally cannot be modified or revoked by the grantor after it is executed, except in limited circumstances provided by law or with beneficiary consent. The permanence of an irrevocable trust is central to many tax and asset-protection objectives, as assets transferred to such a trust are typically removed from the grantor’s estate for estate tax purposes. For ILITs, irrevocability helps ensure that the life insurance proceeds held by the trust are managed and distributed according to the grantor’s plan without being subject to probate.
The trustee is the individual or entity appointed to hold legal title to trust assets and carry out the trust’s terms for the benefit of the beneficiaries. Trustees have duties to administer the trust prudently, keep records, manage policy matters, pay premiums from trust funds, and oversee distributions according to the trust agreement. Selecting a trustworthy and capable trustee is important because the trustee’s decisions affect the management of the policy and the timing and form of beneficiary distributions after the insured’s death.
A beneficiary is a person or entity designated to receive trust benefits, including life insurance proceeds, according to the trust terms. Beneficiaries under an ILIT may receive immediate cash, structured distributions over time, support for education, or other specified uses. The trust can include provisions that tailor distributions to family needs, protect funds from creditors, and address situations such as minor beneficiaries or adults who need assistance managing money. Precise beneficiary designations and trust instructions help ensure that proceeds are used as intended.
A common alternative to an ILIT is retaining ownership of a policy with direct beneficiary designations. While direct designations are simple, they may not provide probate avoidance, creditor protection, or structured distribution. A revocable living trust can provide probate avoidance but does not remove proceeds from the taxable estate if the insured retains incidents of ownership. An ILIT, by contrast, when properly formed and funded, can combine probate avoidance with potential estate tax reduction and greater control over distributions. Deciding among these options depends on policy size, family dynamics, tax considerations, and long-term planning goals.
A limited planning approach may suffice when the life insurance policy and other estate assets are modest relative to estate tax thresholds, or when beneficiaries are capable of managing a lump-sum distribution. If the primary goal is to ensure immediate liquidity for final expenses and small debts, beneficiary designations and a simple will may accomplish the objective without the complexity of an ILIT. In such situations, the costs and permanence associated with an ILIT may outweigh the benefits. A careful review of assets and goals helps determine whether a simpler solution is preferable.
When beneficiaries are financially mature, there are minimal creditor concerns, and there is no reasonable estate tax exposure, a limited approach based on beneficiary designations may be adequate. For families where immediate distribution without restrictions is acceptable, and where policy proceeds are not expected to be subject to claims, the simplicity of direct ownership is appealing. However, even in these cases, it is advisable to coordinate designations with broader estate planning documents so that the overall plan reflects current intentions and minimizes unintended consequences.
Comprehensive planning that includes an ILIT is often recommended when estate tax exposure is a concern or when life insurance proceeds are large enough to significantly affect an estate’s tax liability. Coordinating trust ownership, premium funding through annual exclusion gifts, and timing transfers can create the intended tax outcome. Additionally, complex ownership arrangements, such as policies held jointly or as part of business planning, require careful trust design to avoid unintentional inclusion or disruption of benefits, making a comprehensive approach valuable for these circumstances.
A comprehensive ILIT-centered plan offers structured distribution provisions that can protect beneficiaries from poor financial decisions, creditor claims, or inexperience managing large sums. The trust can provide for staggered distributions, educational or healthcare provisions, and measures to protect beneficiaries who might face legal judgments or bankruptcy. When family dynamics are complex, or when the grantor seeks to preserve wealth for multiple generations, the trust’s terms can deliver greater control and predictability over how insurance proceeds are preserved and allocated over time.
A comprehensive approach that integrates an ILIT with a revocable living trust, wills, powers of attorney, and beneficiary designations creates coherence across documents and assets. This integration helps prevent contradictory instructions, reduces the chance that insurance proceeds will be subject to probate, and aligns distributions with the grantor’s overall objectives. Administrative clarity for trustees and fiduciaries also reduces delays and confusion at an emotional time, while the combined plan addresses both immediate liquidity needs and longer-term asset protection goals for family members and other beneficiaries.
Beyond estate tax planning, a comprehensive plan supports continuity in financial affairs and can anticipate future changes in family structure, financial status, or law. Regular reviews and updates keep documents current so that the ILIT and related instruments reflect life events such as births, deaths, marriages, divorces, or changes in asset ownership. By viewing life insurance planning in the context of a full estate plan, individuals can create flexible arrangements that preserve value, provide for loved ones, and adapt to changing circumstances over time.
When properly structured and timed, an ILIT can reduce the likelihood that life insurance proceeds will be included in the insured’s taxable estate. By transferring ownership of the policy to the trust and arranging premium funding through gifts, the proceeds may pass outside the probate process and may not be subject to estate taxes. Attention to timing rules, such as the three-year look-back for transferred policies, is essential to achieve the intended outcome. Thoughtful drafting and coordination with tax planning can preserve more of the policy’s value for beneficiaries.
An ILIT allows the grantor to set detailed instructions for how proceeds are to be used and distributed, giving greater confidence that funds will serve intended purposes such as education, housing, or long-term support. The trustee’s powers and duties can be tailored to address recordkeeping, claims processing, and beneficiary communications. This level of administrative control helps to reduce family disputes and ensures that assets are managed in alignment with the grantor’s values and priorities over time, while also providing practical oversight during a period of transition.
One of the most important aspects of an ILIT is ensuring that premium payments are handled smoothly so the policy remains in force. Consider whether you will make annual exclusion gifts to the trust, use other gifting strategies, or have the trust purchase a new policy. Document each gift and use clear notices when required. Work with financial advisors to project premium needs and establish a reliable mechanism for funding so that the policy does not lapse, which could defeat the trust’s intended benefits.
An ILIT should function as part of a broader estate plan. Ensure wills, revocable trusts, powers of attorney, and beneficiary designations reflect consistent intentions. If retirement plans or other assets are part of your plan, coordinate how proceeds and distributions should be treated to avoid overlap or unintended tax consequences. Regular plan reviews when family or financial circumstances change will help maintain alignment and preserve the effectiveness of the ILIT and related instruments.
Individuals often consider an ILIT when life insurance proceeds are substantial and there is concern about estate taxes, probate delays, or protecting proceeds from creditor claims. An ILIT can provide a vehicle for removing insurance proceeds from an individual’s taxable estate, ensuring that the funds are distributed according to specific instructions and potentially shielding proceeds from the claims process. Families with minor children, blended family concerns, or beneficiaries who may need assistance managing funds often find the control an ILIT provides to be particularly helpful for long-term planning.
An ILIT may also be appropriate when coordinating business succession, leaving legacy gifts for charities, or aligning life insurance with retirement planning. Because an ILIT is irrevocable, deciding to pursue this route requires careful consideration and coordination with financial, tax, and legal advisors. The trust’s structure, trustee selection, and distribution terms should reflect clear goals so that the arrangement serves needs such as providing liquidity for estate obligations, preserving value for heirs, or supporting specified long-term purposes.
Common circumstances that prompt consideration of an ILIT include owning high-value life insurance policies, having an estate that approaches or exceeds federal or state estate tax thresholds, wishing to control how proceeds are distributed, and seeking to limit probate involvement. Other situations include business succession planning where life insurance supports buy-sell agreements, or cases where beneficiaries may face creditor exposure. An ILIT provides a legal structure to address these issues and can be tailored to fit each family’s structure and long-term objectives.
When a life insurance policy is large relative to the overall estate, transferring the policy into an ILIT can help manage potential estate tax implications and preserve more value for beneficiaries. The trust’s ownership can remove the proceeds from the grantor’s taxable estate when transfers are properly timed and documented. For those with significant insurance holdings, an ILIT provides a deliberate means to handle proceeds without requiring immediate distribution to beneficiaries or exposing proceeds to probate and related delays.
If there are concerns about creditors, lawsuits, or probate risks, an ILIT can create a layer of protection by having the trust own the policy and hold proceeds for beneficiaries under specific instructions. This structure can reduce beneficiaries’ direct exposure to claims and help ensure that insurance benefits are used for intended purposes. The trust’s distribution terms can also limit direct access by beneficiaries who might be vulnerable to claims, while allowing controlled support over time as provided in the trust document.
An ILIT is often used when beneficiaries include minor children, young adults, or dependents who may not be ready to manage a large inheritance. The trust allows the grantor to create distribution rules that provide for education, health needs, and living expenses while delaying full control until beneficiaries reach specified ages or milestones. This approach reduces the risk that a lump-sum distribution would be mismanaged or exposed to external claims, and it gives a trustee clear authority to manage funds for the beneficiary’s long-term wellbeing.
The Law Offices of Robert P. Bergman is available to assist Pico Rivera residents with ILIT formation and related estate planning matters. We prioritize clear communication and practical solutions tailored to your family and financial situation. If you are considering transferring a life insurance policy to a trust or creating a new policy owned by a trust, we can explain the implications and help implement a plan that fits your objectives. To discuss your needs, call our office at 408-528-2827 to schedule a consultation and learn how an ILIT may support your legacy goals.
Clients turn to the Law Offices of Robert P. Bergman for thoughtful estate planning that balances legal requirements with personal priorities. We draft clear trust provisions, coordinate ownership transfers, and work with financial professionals to align insurance strategies with broader plans. Our goal is to build documents that are durable, easy to administer, and suited to each family’s circumstances. We communicate plainly about possible outcomes and required actions so that clients understand the planning process and what to expect at each stage.
We assist with a range of estate planning documents that commonly work together with an ILIT, including revocable living trusts, pour-over wills, powers of attorney, advance health care directives, and guardianship nominations. This integrated approach helps prevent conflicts among documents and ensures that beneficiary designations, retirement accounts, and other assets coordinate with the trust structure. Regular plan reviews and updates are encouraged to ensure that the ILIT and related instruments reflect changes in family situations, asset ownership, or legal developments.
When you choose our firm, you receive practical guidance about funding, trustee selection, and administration that promotes smooth handling of the policy and proceeds. We prepare clear instructions for trustees, advise on keeping required records for premium gifts, and assist with claim submissions when benefits become payable. Our focus is on delivering reliable planning solutions that help protect your objectives, reduce potential administrative burdens on loved ones, and preserve value for the beneficiaries you name in the trust.
Our process begins with fact-finding to understand your family, insurance policies, and goals. We then draft a trust document tailored to your needs, coordinate ownership transfers or policy purchases, and advise on premium funding strategies. After the trust is established, we provide guidance for trustees on recordkeeping, premium payments, and claims procedures so that the trust operates smoothly over time. Periodic reviews help ensure the ILIT remains aligned with changes in circumstances, law, and financial objectives.
During the initial consultation, we gather information about your existing life insurance policies, family structure, estate plan, and financial goals. We discuss whether transferring a current policy to a trust or having the trust acquire a new policy best meets your objectives. This conversation also covers potential gift tax consequences, timing considerations, and how premium funding will be handled. The goal is to identify the most suitable planning approach and provide a clear roadmap for drafting and implementing the trust.
We explore your short- and long-term objectives, beneficiary needs, and any concerns about taxes, creditors, or probate. We review an inventory of assets, including life insurance policies, retirement accounts, and real estate, to determine how the ILIT would integrate with your overall plan. Understanding family dynamics and future intentions allows us to tailor distribution provisions, trustee powers, and successor trustee arrangements so that the trust functions effectively and aligns with your values.
We examine policy documents to confirm current ownership, beneficiary designations, cash values, and any collateral assignments. This review determines whether an ownership transfer is straightforward or whether additional steps are needed to avoid unintended tax or estate consequences. Accurate documentation is crucial for conveying a policy to the trust and for trustee administration. We will advise on necessary notifications to carriers and the appropriate titling to ensure the trust is recognized as the policy owner.
After gathering pertinent information, we draft the ILIT agreement and any complementary documents, such as beneficiary notices or funding instructions. The trust language specifies trustee powers, distribution rules, successor trustees, and procedures for managing the policy and proceeds. We collaborate with clients to ensure the document reflects desired outcomes and coordinate any related estate planning updates so that all instruments are consistent. Clear drafting reduces ambiguity and supports efficient trust administration when benefits become payable.
The trust terms define who will receive proceeds, under what circumstances, and in what form. Distribution provisions can address immediate needs, staggered payments, or uses for education and care. Trustee powers include authority to collect policy proceeds, invest trust assets, pay expenses, and make discretionary distributions. We draft these sections with an eye toward practical administration, flexibility where appropriate, and safeguards that reflect the grantor’s intentions while protecting beneficiaries’ interests.
We prepare documents and instructions to transfer ownership of existing policies to the trust or arrange for the trust to be the owner of a newly issued policy. This may involve formal notices to insurers and coordinating premium funding through designated gifting strategies. We discuss using the annual gift tax exclusion for premium funding and document gifts properly so trustees have clear evidence of funding for administrative records. Timing and documentation are essential to achieve the intended estate planning outcomes.
Once the ILIT is in place, effective administration is critical. Trustees must manage premium payments, record gifts, maintain policy paperwork, and be prepared to file claims when the insured passes. The trust should also be reviewed periodically to confirm that its terms remain appropriate. We provide guidance on trustee duties, recommend best practices for recordkeeping, and help trustees when administrative matters or claims arise so beneficiaries receive proceeds in an orderly manner consistent with the trust terms.
Trustees should confirm that policy ownership is properly recorded and that premium payments are funded and documented. Maintaining thorough records of gifts used to pay premiums and communications with insurers helps demonstrate that the trust was properly funded and administered. Clear records are also indispensable when validating claims and when beneficiaries or fiduciaries need to understand the trust’s financial history. We help set up practical recordkeeping systems and provide templates to assist trustees in fulfilling these responsibilities.
When the insured dies, the trustee files claims with the insurer, collects proceeds, and administers distributions in accordance with the trust. The trustee also communicates with beneficiaries to explain the trust’s provisions and the process for distribution. Over time, if family circumstances or law change, the trust’s role should be reviewed to ensure continued alignment with the grantor’s goals. We provide assistance during claims and offer periodic planning reviews to maintain the effectiveness of the trust arrangement.
An Irrevocable Life Insurance Trust is a trust created to own and control one or more life insurance policies. The trust holds legal ownership of the policy, the trustee manages premiums and policy administration, and beneficiaries receive proceeds according to the trust’s provisions. Because the trust is irrevocable, the grantor gives up direct control over the policy ownership, which can produce estate planning benefits when done correctly. The trust document outlines distribution rules, trustee authority, and procedures for claims and administration. ILITs function by shifting legal ownership of the policy away from the insured to the trust. Funding methods for premiums, trustee powers, and beneficiary instructions are established up front. Proper drafting and timely transfers are important to achieve the desired estate and probate outcomes. Coordination with other planning documents ensures the ILIT integrates with the broader estate strategy so that proceeds are managed and distributed in line with the grantor’s intentions.
Transferring a life insurance policy to an ILIT can remove the proceeds from a taxable estate if transfers are executed properly and certain timing rules are observed. One key consideration is the three-year rule, which can cause proceeds to be included in the insured’s estate if the insured transfers an existing policy and dies within three years of the transfer. New policy purchases by the trust or transfers executed beyond the applicable look-back period may achieve the intended exclusion, but careful planning and timing are essential to avoid unintended inclusion. It is also important to account for any retained incidents of ownership or control that could cause estate inclusion. Activities like retaining the right to change beneficiaries, borrowing against the policy, or maintaining control over policy surrender can undermine the objective of removing proceeds from the estate. Reviewing ownership structure and coordinating with legal and tax advisors will help determine the most effective approach for your situation.
Premiums for an ILIT-owned policy are commonly funded through gifts made by the grantor to the trust. The grantor can use the federal annual gift tax exclusion by making annual gifts to the trust for the benefit of the trust’s beneficiaries, often accompanied by a Crummey notice when necessary to preserve exclusion treatment. Alternatively, other gifting strategies may be employed depending on the grantor’s estate and tax planning objectives. The trust must have a reliable mechanism to pay premiums to keep the policy in force. Clear documentation of gifts and premium payments is essential to show that the trust was properly funded. Trustees should maintain records of each contribution and any notices to beneficiaries. Consulting with financial and tax advisors helps determine the most appropriate funding strategy, balancing the grantor’s liquidity needs and long-term planning goals so that premiums are paid without jeopardizing the trust’s intended benefits.
Selecting a trustee for an ILIT requires balancing trustworthiness, administrative capability, and objectivity. Many clients name a trusted family member, a close friend, or a professional fiduciary as trustee, depending on the complexity of the trust and the anticipated administrative duties. A trustee’s responsibilities include handling premium payments, keeping records of gifts, communicating with beneficiaries, filing claims, and managing distributions. The person or entity chosen should be willing and able to fulfill those duties reliably over time. It is also prudent to name successor trustees in the event the initial trustee becomes unable or unwilling to serve. Some grantors prefer a co-trustee arrangement combining a family member with a corporate trustee to blend personal knowledge with administrative resources. Whatever the choice, the trustee selection should reflect the trust’s needs and the grantor’s confidence that the trustee will administer the trust in accordance with its terms.
An ILIT is generally irrevocable, meaning the trust cannot be easily changed or revoked after it is created. Because the trust’s permanence is what often provides the desired tax and probate benefits, flexibility is limited compared to revocable arrangements. However, some trusts include limited provisions for amendment by the trustee or with beneficiary consent, or the trust can be decanted or modified under certain legal procedures if circumstances warrant and state law permits. Changes should be approached cautiously to avoid defeating the trust’s objectives. Before creating an ILIT, it is important to consider potential future needs and craft the document with sufficient flexibility in trustee powers and distribution standards. Periodic reviews can identify whether more formal legal procedures are needed to update the trust in response to major life events or changes in law. Working with counsel helps identify available modification options consistent with preserving the trust’s benefits.
An ILIT should be coordinated with your revocable living trust and will so that all documents reflect consistent intentions. For example, while the ILIT holds life insurance policies, your revocable trust or will can address other assets and provide complementary instructions. If a pour-over will is used, assets not already titled in the trust can be directed into a revocable trust at death, while the ILIT continues to hold insurance proceeds, often outside probate. Coordination ensures that distributions and titling do not conflict across instruments. Beneficiary designations on retirement accounts and other non-trust assets should also be reviewed to avoid unintended overlap with ILIT objectives. Keeping beneficiary designations consistent with trust provisions prevents conflicting interests and reduces administration complexity. Periodic reviews ensure that all documents function together to implement the estate plan as a cohesive whole.
Trustees should maintain clear, detailed records of all trust activity, including documentation of gifts used to fund premium payments, receipts, policy statements, communications with insurers, and invoices for premiums paid. Accurate records help demonstrate compliance with funding and administration obligations and are essential when filing claims or responding to beneficiary inquiries. Trustees should also preserve copies of the trust agreement, amendments, and any related correspondence that clarifies donor intent or trustee decisions. Good recordkeeping extends to beneficiary notices, distributions made, and evidence of the trustee’s exercise of discretion under the trust terms. Organized records reduce administrative burden, facilitate reporting, and protect both trustees and beneficiaries by providing transparency. We assist trustees by recommending practical recordkeeping templates and practices to maintain the trust’s integrity over time.
Yes. A key timing consideration is the three-year look-back period for transferred policies. If a grantor transfers an existing policy to an ILIT and dies within three years of the transfer, certain rules may cause the policy proceeds to be included in the grantor’s estate. For that reason, timing and planning at the outset are essential. In some cases, purchasing a new policy owned by the ILIT avoids the three-year issue, while transfers of existing policies demand careful review and alternative planning steps. Other timing matters involve how premium gifts are structured and whether annual gift tax exclusions apply. Properly instituted gifting strategies and beneficiary notices should be timed and documented to preserve gift exclusion treatment when applicable. Close coordination with legal and tax advisors will help ensure transfers and funding occur in a way that supports the desired estate planning objectives.
If premium payments cease and the policy lapses, the intended benefits of the ILIT may be lost, which can undermine the estate planning goals for beneficiaries. Trustees should prioritize maintaining premium payments to keep the policy in force, using trust funds or planned gift contributions to cover premiums. If difficulties arise, trustees can explore options such as converting the policy, obtaining a reduced paid-up policy, or pursuing loans if the policy has cash value, depending on the policy type and trust terms. Early communication with beneficiaries and, if applicable, the grantor’s family can help address funding shortfalls before a lapse occurs. If a lapse becomes unavoidable, trustees should document decisions and explore potential alternatives to preserve value, and legal advice should be sought to understand any tax or estate consequences. Proactive administration reduces the risk that the policy will terminate unexpectedly.
To begin creating an ILIT, contact the Law Offices of Robert P. Bergman to schedule an initial consultation. During that meeting we will review your life insurance policies, financial profile, family situation, and planning objectives. We will explain options for trust ownership, premium funding strategies, and how the ILIT would interact with your other estate planning documents. This initial step helps determine whether an ILIT aligns with your goals and what next steps will be required to implement the plan. If you decide to proceed, we will draft the trust agreement, coordinate any necessary ownership transfers or new policy purchases, and prepare documentation to support premium funding and trustee administration. We also provide ongoing guidance for trustees and recommend periodic plan reviews to keep the ILIT aligned with changing circumstances. Call our office at 408-528-2827 to arrange a consultation and begin the planning process.
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