An Irrevocable Life Insurance Trust (ILIT) can be an important component of a careful estate plan for residents of West Rancho Dominguez and the surrounding Los Angeles County area. At the Law Offices of Robert P. Bergman we help clients understand how placing a life insurance policy in an irrevocable trust may remove the policy proceeds from a taxable estate, provide liquidity to pay estate obligations, and create a controlled distribution for loved ones. This introductory overview explains what an ILIT does, general benefits it may provide, and common considerations when deciding whether an ILIT fits within a larger estate strategy.
Choosing the right trust structure and funding it properly are essential steps when establishing an ILIT. Because the trust is irrevocable, the grantor typically gives up direct ownership and control of the policy to the trustee, which ensures the proceeds pass according to the trust terms without becoming part of the grantor’s probate estate. In many situations an ILIT can help reduce estate tax exposure, protect proceeds from creditor claims, and preserve family wealth. This section outlines the basic mechanics and prepares you to explore specific trust provisions, trustee selection, and funding techniques with an attorney.
An ILIT is a powerful tool for helping families manage life insurance proceeds in a way that aligns with long-term objectives. The trust structure allows for precise control over timing and conditions for distributions, which can be especially helpful for beneficiaries who are minors, have special needs, or might otherwise be exposed to creditors. Many clients use ILITs to provide liquidity to pay estate taxes and expenses, ensuring other assets do not have to be liquidated under stress. The arrangement can also create a tax-efficient transfer of wealth across generations while offering a measure of protection that a simple beneficiary designation cannot provide.
The Law Offices of Robert P. Bergman offers comprehensive estate planning services tailored to California residents, including assistance with Irrevocable Life Insurance Trusts, revocable living trusts, wills, powers of attorney, and health care directives. Our attorneys focus on clear communication, practical solutions, and drafting trust documents that reflect the client’s goals and California law. We work with clients to identify appropriate trustees, draft funding plans, and coordinate with financial and insurance professionals to ensure a trust functions as intended after it is established. Our goal is to make the trust process accessible and reliable for families across the state.
An Irrevocable Life Insurance Trust is created when a grantor executes a trust document that removes ownership and certain incidents of control over a life insurance policy by transferring the policy into the trust or arranging for the trust to purchase the policy. Once the policy is owned by the ILIT, death benefits are payable to the trust, which distributes proceeds according to the terms set by the grantor. Proper administration, including timely gift tax reporting and trust trustee actions, is necessary to achieve intended tax and estate planning outcomes and to prevent unintended inclusion of the policy in the grantor’s estate.
Funding an ILIT typically involves either transferring an existing life insurance policy into the trust or having the trust acquire a new policy. When transferring an existing policy, there may be three-year lookback rules that could bring the proceeds back into the taxable estate if the grantor dies within three years of the transfer. When the trust purchases a new policy, the grantor may make annual gifts to trust beneficiaries or to the trustee to cover premiums. Careful drafting and coordination with insurance carriers are necessary to maintain the intended result and avoid inadvertent estate inclusion.
An Irrevocable Life Insurance Trust is a formal legal arrangement in which a trust owns a life insurance policy and the trust document governs how proceeds will be used and distributed upon the insured’s death. Because the trust is irrevocable, the original owner typically cannot reclaim the policy or change beneficiary designations unilaterally. The trustee administers the trust according to the terms provided by the grantor, paying beneficiaries and fulfilling other trust obligations. This structure aims to keep the policy proceeds outside the grantor’s probate estate while providing trustees with the authority to handle claims, taxes, and distributions.
Key elements of an ILIT include the trust document itself, the selection of a reliable trustee, clear beneficiary designations within the trust, and a funding plan for premium payments. Administrative processes include accepting ownership of the policy, coordinating with insurers to change ownership, making or receiving contributions to cover premiums, handling gift tax reporting when contributions are treated as gifts, and managing distributions after the insured’s death. Trustees should maintain records, comply with tax filing obligations, and execute the grantor’s intent while preserving the trust’s tax benefits.
Understanding the common terms used with ILITs helps clients make informed choices. Important concepts include grantor, trustee, beneficiary, funding, life insurance policy ownership, estate inclusion rules, the three-year lookback, gift tax considerations, and trustee powers. This glossary explains each term in plain language so that clients can better discuss options with their attorney and financial advisors. Familiarity with these terms reduces confusion during planning and ensures everyone involved understands the plan’s intended outcomes and administrative responsibilities.
The grantor is the person who creates the ILIT, transfers the insurance policy or provides funds for the trust to purchase a policy, and establishes the trust’s terms. The grantor’s decisions at formation determine distribution timing, trustee powers, and the trust’s objectives. Because the trust is irrevocable, the grantor generally relinquishes direct control over the policy once it is transferred to the trust. The grantor may still retain communication with the trustee about preferences, but legal authority over trust property is held by the trustee according to the trust document.
The trustee is the individual or entity charged with administering the ILIT according to the trust terms, including owning the policy, paying premiums when funds are provided, filing tax returns for the trust if required, and distributing proceeds to beneficiaries upon the insured’s death. Trustees carry fiduciary responsibilities such as acting in beneficiaries’ best interests, maintaining accurate records, and following the trust’s instructions. Choosing the right trustee involves considering reliability, record-keeping ability, and willingness to coordinate with attorneys and financial professionals to manage trust affairs responsibly.
A beneficiary is a person or entity designated to receive distributions from the ILIT when policy proceeds are paid to the trust. The trust document can name primary and contingent beneficiaries, set distribution conditions, and establish schedules or purposes for payments such as education, support, or specific gifts. Because beneficiaries do not directly own the policy while it is in the trust, the trustee has discretion or duty to follow the grantor’s directions when making distributions. Proper beneficiary designation within the trust prevents payout complications and aligns outcomes with the grantor’s wishes.
The three-year rule refers to a tax provision where life insurance proceeds may be included in the decedent’s estate for estate tax purposes if the insured transferred ownership of the policy to another person or trust within three years of death. This lookback period means that transferring an existing policy into an ILIT shortly before death might not accomplish the intended estate tax exclusion. Addressing this rule often requires careful timing when transferring policies or considering the trust purchasing a new policy, and legal counsel can help develop strategies to manage the timing and reporting implications.
When evaluating ILITs against other estate planning mechanisms, it helps to consider the different outcomes each option produces. A revocable living trust allows flexibility and control during the grantor’s life but does not remove assets from the taxable estate. A properly funded ILIT intends to remove life insurance proceeds from estate inclusion and control payout timing for beneficiaries. Simple beneficiary designations are straightforward but may expose proceeds to creditors or estate claims. Choosing between options depends on goals like tax planning, asset protection, and desired control over distributions, and these trade-offs should be discussed with legal counsel.
A limited approach might be appropriate for individuals whose life insurance policies are small relative to the size of their overall estate and where the likelihood of significant estate tax liability is low. For some clients, keeping a policy outside of a trust and using straightforward beneficiary designations aligns better with their desire for simplicity and low administrative overhead. In these situations the benefits of creating and funding an ILIT may not justify the loss of direct control, and simpler arrangements can provide needed protection without the complexity of an irrevocable trust.
If a client values flexibility and anticipates changes in circumstances, a revocable approach or maintaining direct ownership may be preferred. Revocable trusts and beneficiary designations allow the owner to modify arrangements in response to family changes, health events, or tax law shifts. A limited approach can minimize ongoing administration, avoid additional trust tax filings, and keep ownership straightforward. Clients who prioritize the ability to change their plan at any time often choose solutions that preserve control while achieving basic goals like designating beneficiaries and providing immediate financial support to loved ones.
A comprehensive ILIT strategy is often warranted when an estate includes illiquid assets such as real estate, business interests, or retirement accounts that may require cash to settle taxes and administration costs. Establishing an ILIT can ensure life insurance proceeds are available to pay estate taxes, creditors, and settlement expenses without forcing the sale of other assets under unfavorable conditions. Proper planning includes drafting trust terms that provide for timely disbursements, coordinating life insurance coverage amounts with estate liquidity needs, and ensuring the trust structure supports the intended financial goals.
Families with blended relationships, beneficiaries with special needs, or concerns about creditor claims may benefit from a more comprehensive ILIT plan that addresses specific distribution conditions, spendthrift protection, and long-term stewardship. A detailed trust document can establish provisions for managed payouts, successor trustees, and coordination with special needs planning tools to preserve government benefits. For clients seeking to protect assets from future creditors or to control how and when beneficiaries receive proceeds, the comprehensive approach provides tailored mechanisms that basic beneficiary designations cannot offer.
A carefully drafted ILIT provides clear instructions for trustees, minimizes ambiguity, and reduces the risk of disputes among beneficiaries. By specifying distribution schedules, permissible uses of funds, and successor trustee provisions, the trust helps ensure proceeds are used according to the grantor’s wishes. This clarity often reduces administrative friction and supports efficient trust administration. Additionally, integrating the ILIT within a broader estate plan ensures coordination with wills, revocable trusts, powers of attorney, and beneficiary designations so that all documents work together to achieve consistent outcomes.
Another benefit of a comprehensive approach is the potential for tax and creditor protection benefits when the trust and funding decisions are made with care. Proper ownership and administration can help keep life insurance proceeds out of the probate estate and support long-term wealth preservation goals. Coordinated planning can also address business succession, charitable gifts, or special needs funding, making the ILIT a flexible component of a multi-faceted plan. Trustees and advisors play complementary roles in implementing and maintaining the strategy over time.
An ILIT can preserve family wealth by providing liquid funds when they are most needed: at the time of the insured’s death. These proceeds can be allocated to cover estate taxes, debts, and final expenses, protecting other estate assets from forced sale. The trust’s terms can direct distributions for long-term support, education, or trust funds for descendants, helping ensure funds serve intended purposes across generations. When combined with sound asset allocation and coordination with retirement planning, an ILIT helps protect the family’s financial foundation during a period of transition.
An ILIT affords the grantor significant control over how and when proceeds are distributed by instructing the trustee to make payments according to specified conditions or schedules. This control can prevent immediate lump-sum distributions that might be squandered and instead provide steady support, staged distributions for major life events, or funds earmarked for specific expenses like education or home purchases. The result is a plan that aligns payouts with the grantor’s priorities while providing oversight through a trustee who is tasked with carrying out those directives faithfully.
When creating an ILIT, plan how premiums will be funded so the trustee can pay premiums routinely and avoid policy lapse. Common approaches include annual gifts to the trust, creating a schedule for contributions, or directing funds from other trust assets. It is important to document gifts and any gift tax allowances accurately to prevent disputes and ensure compliance with reporting requirements. Communication with life insurance carriers and timely premium payments are essential to maintain the policy and preserve the trust’s intended benefits over the long term.
Choose a trustee who can handle administrative tasks, maintain accurate records, and coordinate with legal and financial advisers; this might be an individual trustee you trust or a corporate fiduciary depending on the estate’s complexity. The trustee will be responsible for paying premiums, filing tax returns if required, and distributing proceeds according to the trust terms. Consider naming a successor trustee and provide clear guidance in the trust document about decision-making authority, payment priorities, and processes for resolving disputes, which helps maintain continuity and protect beneficiaries’ interests.
Residents of West Rancho Dominguez often turn to an ILIT to address estate liquidity, tax planning, and controlled distributions to family members. For households with significant life insurance coverage, placing the policy in an ILIT can remove proceeds from the probate estate and help manage estate tax exposure. People also use ILITs to provide for minor children, protect funds for a beneficiary with special needs, or create a reliable funding source for business succession or debts. A well-drafted ILIT ensures that life insurance proceeds are used in line with the grantor’s goals during an often stressful period.
Families whose assets include real estate or retirement accounts may especially benefit from an ILIT because life insurance proceeds can provide ready cash when those assets are not easily liquidated. This helps avoid selling property quickly at unfavorable prices to meet tax or administration costs. Additionally, the trust format allows the grantor to impose distribution guidelines and protect beneficiary inheritances from creditors, divorce settlements, or other claims. The result is a planning tool that supports continuity for the family while aligning with California legal and tax considerations.
Common circumstances that prompt clients to create an ILIT include anticipated estate tax liabilities, ownership of illiquid assets, a desire to control how life insurance proceeds are used, concern about beneficiaries’ creditor exposure, and the need to provide ongoing support for a family member with special needs. Business owners often use ILITs to fund buy-sell arrangements or to ensure a smooth transition of ownership. In each case, the ILIT is tailored to address the particular issue while preserving the grantor’s overall estate planning goals and ensuring compliance with California requirements.
When a life insurance policy’s death benefit is sizable relative to the grantor’s estate, placing the policy in an ILIT can be an effective way to keep proceeds out of the probate estate and potentially minimize estate tax exposure. This approach requires careful timing and administration to avoid inclusion under lookback rules, but when executed properly it can provide liquidity for beneficiaries and reduce the tax burden on the remaining estate assets. Coordination with tax and insurance advisors helps align coverage amounts with estate planning objectives.
An ILIT can be designed to provide for dependents who need long-term oversight or protection, including minors or those receiving government benefits. The trust can specify distribution schedules, appoint a trustee to manage funds responsibly, and include provisions to avoid disqualifying public benefits for a beneficiary with special needs. By setting clear terms for distributions and oversight, an ILIT helps ensure funds are used for the intended purpose while safeguarding eligibility for assistance programs and offering a framework for long-term financial support.
Business owners and those with concentrated holdings may use an ILIT to provide the financial means for business continuity, buy-sell arrangements, or to pay estate settlement expenses. Life insurance proceeds held by the trust can be directed to co-owners or the estate to facilitate a transition without forcing a distress sale. Planning for such contingencies helps preserve business value for heirs and provides a measured way to handle estate costs. The ILIT can be coordinated with other documents to ensure comprehensive succession planning.
The Law Offices of Robert P. Bergman serves clients across California, including West Rancho Dominguez, providing guidance on creating and administering Irrevocable Life Insurance Trusts. We help clients evaluate whether an ILIT aligns with their objectives, draft trust documents that reflect personal priorities, coordinate transfers and funding arrangements, and advise trustees on ongoing administration. Our approach focuses on clear communication and practical steps to implement a trust that supports a family’s goals while fitting within the broader estate plan and applicable California legal requirements.
Clients trust our firm for personalized estate planning advice and careful drafting of ILIT documents tailored to California law. We prioritize listening to client goals, explaining available options, and designing trust provisions that align with family circumstances. Whether the need is to provide liquidity, protect a beneficiary, or preserve wealth for future generations, our attorneys guide clients through the trade-offs and practicalities of an ILIT, ensuring the trust functions as intended and integrates smoothly with wills, revocable trusts, and powers of attorney.
Our firm assists with the technical aspects that make an ILIT effective, including coordinating with insurance carriers for ownership transfers, advising on premium funding strategies, and preparing necessary tax filings and reports. We also help name and prepare trustees to fulfill their responsibilities and provide continuity through successor trustee provisions. Clear documentation and administration reduce the risk of disputes and ensure that policy proceeds are distributed according to the grantor’s wishes without unnecessary delay or complication.
We place emphasis on communication and practical implementation so families understand the steps required to create and maintain an ILIT. From drafting trust instruments to coordinating with financial professionals and trustees, our services focus on reducing uncertainty during an emotionally difficult time. Clients benefit from a plan designed to protect the family’s financial future, preserve estate value, and provide a predictable mechanism for distributing life insurance proceeds in alignment with the grantor’s priorities.
Our process begins with a detailed consultation to identify your objectives, assets, and family dynamics, followed by drafting a trust document that reflects those goals and complies with California law. We handle policy transfers or trust purchases, prepare funding strategies for premiums, and advise on tax and reporting matters. Once the trust is in place we assist with trustee orientation, record keeping expectations, and ongoing administration matters. Clear steps and practical support make implementation straightforward and reduce the likelihood of administrative errors.
In the initial meeting we discuss goals, current life insurance policies, estate assets, and family circumstances to determine if an ILIT is appropriate. We evaluate whether transferring an existing policy or having the trust purchase a new policy better meets your objectives and review potential tax and timing implications. This planning stage establishes funding strategies for premiums, identifies potential trustees, and outlines the trust’s distribution directions so the drafting phase can proceed with clarity and purpose.
We assess the amount of life insurance needed to meet estate liquidity objectives and whether existing policies should be transferred to the trust or replaced by new coverage owned by the trust. This assessment factors in anticipated estate taxes, debts, and the needs of beneficiaries. Our role is to translate the client’s financial picture into a recommended coverage approach that supports the trust’s intended function while considering timing, lookback rules, and premium affordability.
During initial planning we discuss trustee selection and draft core trust terms such as beneficiaries, distribution conditions, trustee powers, and successor trustees. These foundational choices shape how the trust operates and provide clarity for trustees and beneficiaries. We help clients weigh the benefits of individual versus institutional trustees, include provisions for trustee compensation and duties, and ensure the trust language aligns with the client’s intentions for control, flexibility, and protection of proceeds.
In this phase we prepare the trust instrument and related documents, coordinate with life insurance carriers for assignments or new policy applications, and implement funding mechanisms for premium payments. Proper titling and documentation are essential to maintain the trust’s intended tax and asset protection benefits. We also guide the grantor through any required gift tax filings and help establish processes for annual gifts if that strategy is used to cover premiums, ensuring the administrative pathway is clear and sustainable.
We prepare the trust agreement with precise language to reflect distribution terms, trustee authorities, and administrative instructions. Supporting documents may include assignment forms, carrier notices, and premium funding instruments. Clear documentation helps avoid future disputes and ensures trustees have the legal authority to manage the policy. We also draft any ancillary documents needed in the estate plan so the ILIT functions cohesively with wills, powers of attorney, and healthcare directives.
Coordination with insurance carriers is essential when transferring existing policies or arranging for the trust to purchase new coverage. We assist clients in completing ownership change forms, confirming insurability and premium schedules, and ensuring the trust is named as the policy owner. For transferred policies we review timing issues such as the three-year lookback and advise on steps to maintain intended tax benefits. This coordination ensures the insurance component aligns with the trust terms and funding strategy.
After the trust is funded and the policy ownership is confirmed, we support trustee onboarding by explaining duties, recordkeeping expectations, and the processes for premium payments and beneficiary distributions. Ongoing administration may involve tax filings, periodic reviews, coordination with financial advisors, and execution of distributions when the policy pays out. We remain available to advise trustees and beneficiaries to promote accurate administration and to help address any disputes or unforeseen issues that arise during the trust’s lifespan.
Trustees must keep accurate records of premium payments, trust income, gifts to the trust, and communications with beneficiaries and insurance carriers. We provide guidance on bookkeeping practices, filing requirements, and how to document decisions in ways that protect the trustee and support transparent administration. Proper recordkeeping is also essential if the trust must file tax returns or respond to inquiries from taxing authorities or creditors, and consistent practices reduce the risk of disputes and misinterpretations of trust terms.
When life insurance proceeds are paid to the ILIT, the trustee follows the trust’s distribution instructions, coordinates payment of estate obligations if applicable, and makes beneficiary distributions according to the grantor’s directives. Trustees may also need to work with accountants or attorneys to file required tax returns and manage any creditor claims against the estate. Clear directions in the trust and proactive communication with beneficiaries help ensure that proceeds are disbursed efficiently and in accordance with the grantor’s wishes.
An Irrevocable Life Insurance Trust is a trust that owns a life insurance policy and controls how the death benefit is distributed to beneficiaries. The grantor creates the trust, signs the trust document, and then transfers an existing policy into the trust or arranges for the trust to purchase a new policy. The trustee, who is appointed in the trust document, holds legal title to the policy and follows the trust terms to administer policy benefits and make distributions when the insured dies. The trust’s irrevocable nature typically means the grantor cannot later reclaim ownership of the policy. The trust structure is designed to provide specific benefits, including managerial control over payouts, protection from creditors in certain situations, and potential removal of the policy proceeds from the grantor’s probate estate when properly executed. To achieve these outcomes, the trust must be drafted correctly, the transfer or purchase must be handled according to carrier rules, and any funding plans for premiums must be implemented in a documented way. Consultation during drafting and funding helps avoid common pitfalls that can affect the trust’s intended function.
Transferring a policy to an ILIT can remove death benefits from the grantor’s taxable estate, but only if certain requirements are met. A key consideration is the timing of the transfer: if the grantor dies within three years of transferring ownership, tax rules may bring the proceeds back into the estate. Additionally, the grantor must relinquish incidents of ownership, and the trust must be properly drafted and administered so the policy is recognized as owned by the trust under applicable law. Because tax outcomes depend on both timing and administrative details, many clients choose to coordinate the transfer with legal and tax advice to ensure the transfer accomplishes their goals. In some cases a trust-owned policy purchased by the ILIT avoids lookback issues, while transferring an existing policy requires careful consideration of the three-year rule and other potential tax implications.
Premiums for a policy owned by an ILIT are typically paid from trust assets or from gifts made to the trust for that purpose. A common approach is for the grantor to make annual gifts to the beneficiaries of the trust, which the trustee then uses to pay premiums. These gifts must be documented and sometimes structured to fit within annual gift tax exclusions, depending on the funding strategy chosen. Accurate recordkeeping and communication between the grantor and trustee help ensure premiums are paid on time to keep the policy in force. Another mechanism is to structure the trust so it holds other assets that produce income or liquidity to cover premiums. When premiums are funded by gifts, it is important to consider applicable gift tax reporting and to coordinate with advisors. Proper funding ensures the policy remains active and that the trust’s benefits will be available when the death benefit is paid.
Selecting a trustee for an ILIT involves evaluating who can reliably administer the trust, keep accurate records, and coordinate with insurance carriers and advisors. The trustee will handle premium payments, file necessary tax returns, and distribute proceeds according to the trust document, so qualities such as financial competence, impartiality, and willingness to serve are important considerations. Some clients appoint a trusted family member or friend, while others choose a professional or corporate trustee for continuity and administrative experience. It is also important to name successor trustees and provide clear authority and guidance within the trust document. Successor trustee provisions reduce the risk of administrative gaps and allow for smoother transitions. Discussing possible trustee scenarios during planning helps ensure the selected person or entity is prepared for the responsibilities and has a workable plan for recordkeeping and communication with beneficiaries.
An ILIT can be structured to support a beneficiary with special needs without jeopardizing eligibility for public benefits, provided the trust is drafted carefully and coordinated with a special needs trust if necessary. The ILIT can direct funds for supplemental needs such as education, therapy, or medical expenses that are not covered by public benefits. However, because each situation is unique, the trust provisions should be reviewed to ensure distributions are made in a way that preserves the beneficiary’s access to assistance programs and aligns with long-term care and financial goals. Coordination with a special needs planning attorney or advisor is often helpful to integrate an ILIT with other protective tools. Clear language about the purpose of distributions, permitted uses, and trustee discretion can provide meaningful support while avoiding unintended disqualification from means-tested benefits. Planning in advance reduces confusion and ensures funds are available in a way that helps the beneficiary over time.
Placing a policy in an ILIT involves giving up direct ownership and control, which may be viewed as a downside if you prefer flexibility to change beneficiaries or policy terms. Because the trust is irrevocable, the grantor typically cannot later transfer the policy back or change the trust unilaterally. Additionally, an ILIT creates administrative responsibilities for trustees, including recordkeeping and potential tax filings, which may increase complexity relative to simple beneficiary designations. The three-year lookback rule also poses a timing consideration that can limit the immediate effectiveness of a recent transfer. Another consideration is the potential cost of establishing and maintaining the trust, including attorney fees and possibly compensation for a professional trustee. For some clients these costs are justified by tax or protection benefits, while for others a simpler approach makes more sense. We discuss these trade-offs during planning to ensure the chosen option aligns with both financial and personal priorities.
The three-year rule is a tax provision that can bring life insurance proceeds back into the insured’s estate if the insured transferred the policy within three years of death. This lookback period means that a recent transfer of an existing policy into an ILIT may not achieve estate tax exclusion if death occurs within that timeframe. The rule is intended to prevent last-minute transfers purely for tax avoidance, so timing and planning are critical to realize the trust’s intended tax benefits. To address the three-year issue, some clients arrange for the ILIT to purchase a new policy, or they transfer ownership well in advance of potential mortality risks. In all cases it is important to consider insurability, policy replacement rules, and the estate’s overall timeline. Discussing these considerations with counsel and insurance professionals helps determine the best approach for each client’s circumstances.
An ILIT can be a useful tool in business succession planning by providing funds to buy out a deceased owner’s interest or to provide liquidity for a business transition. Proceeds held in the trust may be directed to co-owners or to the estate to support a buy-sell agreement, ensuring continuity without forcing a sale of business assets at an inopportune time. Integrating an ILIT into a broader succession arrangement helps align business and personal estate goals and provides a predictable funding source for agreed-upon transfers. Successful business use of an ILIT requires careful coordination between corporate documents, buy-sell agreements, and the trust instrument. Insuring key persons and structuring payouts to support the continuity of operations are common objectives. Legal and financial professionals should collaborate to ensure the trust terms and insurance arrangements are consistent with business succession goals and that funding levels match the expected needs.
If a policy owned by an ILIT lapses, the intended death benefit protection and trust distributions may be lost, which can create significant problems for an estate plan that relied on those proceeds. Trustees should monitor premium payment schedules, maintain adequate funds or gifts to cover premiums, and communicate with insurance carriers to avoid unintentional lapses. If a lapse occurs, options may be limited and could include reinstatement if the carrier permits or exploring other funding measures, but reinstatement may involve proving continued insurability and paying back premiums. Proactive administration and communication with the trustee and insurer reduce the risk of a lapse. Regular reviews of premium funding strategies and contingency planning help maintain coverage. If a lapse does occur, consult legal and insurance advisors promptly to evaluate potential remedies and to adjust the estate plan as needed to address any resulting gaps in funding or coverage.
To begin creating an ILIT in West Rancho Dominguez, start with an initial consultation to discuss your goals, current policies, and family circumstances. Gather information about any existing insurance policies, beneficiary designations, and relevant estate planning documents. During the consultation we evaluate whether transferring a policy or having the trust purchase new coverage better meets your objectives and outline the steps needed to draft the trust document and implement the funding plan. After the planning meeting we prepare the trust documents, coordinate with insurers on policy transfers or purchases, and assist with any gift tax reporting or funding steps. We also advise on trustee selection and provide guidance for ongoing administration. Early coordination with insurance and financial advisers ensures a smoother implementation and alignment with your broader estate plan.
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