An Irrevocable Life Insurance Trust (ILIT) can play a central role in a thoughtful estate plan for residents of Mission Viejo and surrounding Orange County communities. This guide explains what an ILIT is, how it works with life insurance policies, and why individuals with significant life insurance proceeds or estate tax concerns consider this planning tool. The Law Offices of Robert P. Bergman provides clear, practical guidance on creating and maintaining an ILIT tailored to a client’s family situation, assets, and long-term goals, with attention to California law and local probate practices.
Choosing to create an ILIT involves several decisions about trust terms, trusteeship, beneficiary designations, and funding arrangements. While ILITs can help keep life insurance proceeds outside of an estate for tax purposes and protect funds for intended beneficiaries, they also create binding legal obligations once established. Our firm explains the steps to set up an ILIT, coordinates with life insurance carriers, and helps clients understand ongoing trustee responsibilities, gift tax considerations, and methods to ensure the trust fulfills the grantor’s wishes for their family and legacy.
An ILIT can provide multiple potential benefits: it can remove life insurance proceeds from a taxable estate, provide creditor protection for beneficiaries, and create a controlled mechanism for distributing proceeds over time. For families with complex dynamics, blended households, or beneficiaries with special needs, an ILIT offers precise distribution instructions that help preserve assets and honor the grantor’s intentions. The trust structure also enables professional or trusted family members to manage funds on behalf of beneficiaries, reducing the risk that a lump-sum payment will be misused or subjected to litigation after the insured’s death.
The Law Offices of Robert P. Bergman assists families across California with estate planning matters, including the formation and administration of ILITs. Our approach emphasizes clear communication, careful drafting of trust provisions, and coordination with financial advisors and life insurance carriers. We prepare documents such as trust instruments, pour-over wills, financial and health care powers of attorney, and trust certifications so clients have a comprehensive plan. Our goal is to create durable arrangements that reflect each client’s wishes while minimizing the potential for disputes and unnecessary taxes.
An ILIT is a trust that owns one or more life insurance policies on the grantor’s life. Once the trust owns the policy, the death benefit is paid into the trust upon the insured’s death and distributed according to the trust terms. The grantor typically transfers an existing policy to the trust or has the trust purchase a new policy. Funding premiums often involves annual gifts to the trust under the federal gift tax annual exclusion, and the trustee uses those gifts to pay premiums. Proper setup and timing are essential to achieve the desired tax and probate outcomes.
A critical component of ILIT planning is avoiding inclusion of the policy proceeds in the grantor’s taxable estate. To reduce that risk, legal formalities and timing rules must be observed, such as transferring an existing policy well before the grantor’s death to avoid the three-year lookback under federal rules. The trust document should clearly state trustee powers, distribution standards, and procedures for interacting with beneficiaries. Ongoing trust administration, including recordkeeping and gift documentation, helps ensure that the ILIT performs as intended through changes in family circumstances and law.
An ILIT is a nonrevocable trust that owns life insurance policies for the purpose of holding death benefits outside of a grantor’s estate. The grantor transfers ownership of a life insurance policy to the trust or causes the trust to acquire a new policy. The trustee manages the policy, pays premiums, and holds proceeds on behalf of beneficiaries according to instructions in the trust document. Because the trust is irrevocable, the grantor cannot unilaterally change the trust terms after formation, which makes careful drafting and selection of trustees essential to the long-term functionality of the arrangement.
Key elements of an ILIT include the trust agreement, trustee selection, beneficiary designations, premium funding strategy, and coordination with the insurer for ownership and beneficiary changes. The process typically involves drafting the trust, transferring or issuing the policy in the trust’s name, documenting annual gifts used to pay premiums, and maintaining trust records. Trustees must make timely premium payments, prepare certifications or notices needed for beneficiaries, and follow the distribution rules. Regular reviews ensure the ILIT remains aligned with changes in policy terms, tax laws, and the grantor’s family circumstances.
Understanding common terms helps clients make informed decisions. Words such as grantor, trustee, beneficiary, gift tax exclusion, policy ownership, irrevocability, and pour-over will come up frequently during ILIT planning. Recognizing how each concept affects the structure, tax treatment, and control over proceeds clarifies the tradeoffs involved. Our team explains these terms in plain language, shows how they apply to real-life scenarios, and provides examples of trust provisions that achieve specific goals, such as income generation for beneficiaries or staged distributions to younger heirs.
The grantor is the person who creates the trust and typically provides the assets or funding that enable the trust to operate. In ILIT planning, the grantor is often the insured individual who transfers a life insurance policy into the trust or has the trust purchase the policy. Because the trust is irrevocable, the grantor gives up unilateral control over the transferred policy, so the terms of the trust need to clearly reflect the grantor’s intentions for how proceeds should be managed and distributed after the grantor’s death.
The trustee is the individual or institution responsible for administering the trust according to its terms. Trustees collect gifts intended to fund premium payments, pay insurance premiums, maintain records, file any required tax returns, and distribute proceeds to beneficiaries as directed. Choosing a trustee who can act impartially, handle administrative tasks, and communicate with beneficiaries is an important decision. The trustee’s responsibilities continue after the insured’s death, when the trustee must file claims, manage trust assets, and carry out distribution provisions.
A beneficiary is a person or entity designated to receive benefits from the trust, including proceeds from a life insurance policy owned by the ILIT. Beneficiaries may receive payments outright or receive benefits under conditions set by the grantor, such as staged distributions, age thresholds, or specific uses like education or healthcare. The trust document can impose standards for discretionary distributions, protect benefits from creditors, and provide safeguards for beneficiaries who may be minors or have special financial needs.
The gift tax annual exclusion allows individuals to give a certain amount each year to another person without triggering federal gift tax reporting or consumption of their lifetime gift tax exemption. When funding an ILIT, the grantor often makes annual exclusion gifts to the trust to cover policy premiums. Proper documentation and compliance with trust terms are necessary to ensure the gifts qualify for the annual exclusion. Coordinating with tax advisors helps confirm that gifting arrangements are structured to take advantage of available exclusions and to document those gifts correctly.
When evaluating an ILIT, it helps to compare it with other tools such as keeping a policy in one’s name, naming individual beneficiaries directly, or using a revocable living trust. Keeping a policy outside a trust may be simpler but can result in inclusion of the proceeds in the estate for tax purposes. A revocable living trust offers flexibility while alive, but does not remove life insurance proceeds from the taxable estate unless ownership is transferred. An ILIT, by contrast, provides more targeted tax and creditor protection benefits at the cost of reduced flexibility due to its irrevocable nature.
For individuals whose life insurance policies have modest death benefits and whose beneficiaries are able to manage lump-sum distributions responsibly, a limited approach may be appropriate. When the potential tax exposure is low and the family prefers direct beneficiary designations, keeping the policy in the insured’s name or naming beneficiaries directly can reduce complexity and administrative costs. In such cases, a straightforward beneficiary designation combined with a revocable trust and powers of attorney may provide adequate protection and ensure a smooth transition without implementing an irrevocable arrangement.
A limited approach can be suitable when the primary objective is immediate liquidity for final expenses and short-term needs rather than long-term asset management. If beneficiaries are mature, financially capable, and there are no concerns about creditor claims or estate tax exposure, families may favor simpler arrangements. Keeping life insurance outside of a trust reduces administrative burdens and ongoing trustee duties, while still providing funds quickly to cover obligations such as funeral costs, debts, or short-term living expenses for surviving family members.
When life insurance death benefits are substantial or family dynamics involve blended households, minors, or beneficiaries with unique financial needs, a comprehensive ILIT arrangement provides structure and protection. A carefully drafted trust offers targeted distribution standards, creditor protection, and tax planning benefits while preserving the grantor’s control over how proceeds are used. Comprehensive planning includes detailed drafting, trustee selection, coordination with carriers, and clear instructions that anticipate future events such as remarriage, divorce, or changes in beneficiary circumstances.
For families seeking to preserve wealth over multiple generations, reduce estate inclusion of life insurance proceeds, and set conditions on distributions, a robust ILIT provides important tools. The trust can hold proceeds out of the taxable estate, provide for staged distributions, and protect assets from beneficiary creditors. Comprehensive planning also addresses gift tax considerations, trustee powers, and contingency plans in the event a trustee resigns or a beneficiary’s circumstances change, ensuring the grantor’s long-term objectives are more likely to be fulfilled.
A comprehensive approach to ILIT planning provides clarity, legal protection, and administrative readiness. With carefully drafted trust language, a designated trustee who understands their responsibilities, and proper coordination with insurance carriers, families can reduce the likelihood of disputes and unintended tax consequences. Comprehensive planning anticipates life changes, outlines distribution conditions, and ensures the trust remains functional and enforceable under California law, giving grantors confidence that the financial support intended for loved ones will be available when needed.
Additionally, a full-service approach includes documentation and recordkeeping practices that support the trust’s tax and legal position, such as clear gift records and formal notices to beneficiaries when required. Working with legal counsel to create an ILIT also enables coordination with other estate planning tools — including revocable trusts, pour-over wills, powers of attorney, and health care directives — yielding a cohesive plan that addresses both immediate needs and long-term legacy goals for families in Mission Viejo and across Orange County.
One important benefit of an ILIT is the potential to reduce estate inclusion of life insurance proceeds, which can result in significant estate tax savings for larger estates. Through careful timing of transfers, proper use of gifting strategies, and meticulous trust administration, an ILIT can help ensure proceeds are excluded from the grantor’s taxable estate. This planning requires attention to federal rules such as the three-year inclusion period and to state considerations, and it should be coordinated with broader estate planning goals to maximize the intended benefits for beneficiaries.
An ILIT gives the grantor control over how proceeds are used after death, allowing for staged distributions, educational funding provisions, or protections for beneficiaries facing potential creditor claims. This structure can protect assets from unintended consumption and provide stable financial support at times when beneficiaries may need assistance. By carefully setting distribution standards and trustee powers, a trust can balance flexibility and oversight, helping ensure that proceeds serve the grantor’s purpose while fitting into a family’s long-term financial plan.
Maintaining clear documentation for annual gifts that fund ILIT premiums is essential. Yearly written records, bank transfers or checks to the trustee, and formal acknowledgement of receipt help demonstrate that gifts qualified for the federal annual exclusion. Good records protect the trust’s tax position and reduce confusion among beneficiaries and advisors. Trustees should maintain a dedicated ledger for premium payments, record correspondence with the insurer, and keep copies of trust amendments and tax filings to preserve transparency and compliance over time.
Selecting trustees who are willing and able to handle ongoing administrative tasks is important. Trustees must pay premiums, handle communications with beneficiaries and the insurer, and manage trust assets after a policy claim is paid. A trustee should be comfortable with basic recordkeeping, tax filing coordination, and making distribution decisions consistent with the trust document. In some cases, appointing a professional fiduciary or co-trustees can provide continuity and impartial administration when family dynamics or beneficiary needs make that approach preferable.
Consider an ILIT if you want to protect life insurance proceeds from estate inclusion, provide creditor protection for beneficiaries, or structure distributions to meet long-term family needs. This tool is commonly used by clients with larger policies, those who own significant assets that could expose life insurance proceeds to estate tax, or individuals who want controlled distributions to heirs. An ILIT can also provide certainty and governance over how proceeds are used for education, healthcare, or support for dependents who may lack financial acumen or face special circumstances.
Another reason to consider an ILIT is to create liquidity for paying estate expenses without forcing the sale of other assets. By ensuring life insurance proceeds are available outside of probate, families may avoid delays and reduce the need to liquidate real estate or business interests during a difficult time. When working with legal counsel, clients can explore how an ILIT fits with trusts such as revocable living trusts, pour-over wills, and other documents that together form a comprehensive estate plan tailored to California law and individual family objectives.
Common circumstances include owners of large life insurance policies who wish to limit estate tax exposure, business owners who want liquidity for succession planning, blended families seeking to protect inheritances for specific children, and families with beneficiaries who require managed distributions. Clients with high net worth assets, retirement accounts, or significant real estate holdings frequently use ILITs to preserve wealth and protect proceeds from potential creditors or tax consequences. Each situation requires tailored drafting to reflect the grantor’s intentions and family dynamics.
When life insurance death benefits are sizable relative to the grantor’s estate, ensuring those proceeds are not subject to estate inclusion can avoid larger tax obligations and preserve more value for beneficiaries. An ILIT can transfer policy ownership and manage proceeds so they are held outside of the estate, provided that transfers are done with attention to timing rules and legal formalities. Proper coordination with tax advisors and careful trustee documentation are essential to maintain the intended benefits of such an arrangement.
Business owners often require liquidity upon their passing to facilitate buyouts, settle obligations, or fund succession plans. An ILIT holding a life insurance policy can provide the necessary funds without entangling proceeds in probate or estate administration. By naming the appropriate beneficiaries or using trust distribution provisions, the grantor can ensure the business has access to cash at a critical time while maintaining protections for family members who may rely on ongoing income from the business.
When beneficiaries may not be ready to manage a large inheritance due to youth, disability, or other circumstances, an ILIT can direct funds to be held and administered according to specific conditions. Trust provisions might set age thresholds, require distributions for healthcare or education, or permit discretionary support for living expenses. This structure helps preserve the long-term welfare of beneficiaries while protecting trust assets from creditors or poor financial decisions, which makes it a valuable tool for families seeking stability and continuity.
The Law Offices of Robert P. Bergman is available to help Mission Viejo residents and Orange County families evaluate whether an ILIT fits their estate planning objectives. We explain the mechanics of creating a trust, coordinate transfers of policy ownership, and help document annual gifts and trustee actions. Our process includes reviewing your existing estate plan documents, assessing the size and structure of insurance policies, and recommending measures that align with your financial and family goals while complying with California law and insurer procedures.
Clients working with our firm receive thorough explanations of how an ILIT will interact with their broader estate plan and clear guidance on drafting trust provisions that reflect their intentions. We focus on drafting precise language, preparing required trust certifications, and coordinating with life insurers and tax advisors. Our goal is to reduce administrative uncertainty and provide a durable structure for the management of life insurance proceeds that aligns with the client’s family and financial circumstances.
We assist clients at each stage, from initial planning and trust formation to trustee guidance and administration after a claim is made. This includes practical steps like documenting gifts for premium payments, ensuring timely filings, and advising trustees about their responsibilities. By addressing these technical and administrative aspects early, we help minimize the risk of disputes or unintended tax consequences and aim to make the process smoother for families during stressful transitions.
Beyond document preparation, we provide ongoing support for clients who need revisions to reflect life changes or for trustees who require clarification on distribution standards. Our firm also prepares complementary documents such as revocable living trusts, pour-over wills, financial powers of attorney, health care directives, and guardianship nominations to ensure a cohesive estate plan that responds to both immediate and long-term needs of the family.
Our process begins with an initial consultation to understand your financial picture and family goals, followed by a detailed review of existing policies and estate documents. We then recommend whether an ILIT is appropriate and draft trust documents tailored to your needs. After formation, we assist with transferring policy ownership, preparing trust certifications, and documenting premium funding. We remain available to guide trustees and beneficiaries and to update the plan as circumstances or laws change, ensuring continuity and clarity throughout the trust’s life.
During the first step, we gather detailed information about your life insurance policies, assets, family dynamics, and existing estate planning documents. This includes policy statements, beneficiary designations, and information about potential beneficiaries’ needs. We discuss your goals for legacy planning, tax minimization, and beneficiary protection. This information allows us to design an ILIT that aligns with your objectives and to identify any coordination needed with other estate planning instruments to achieve a synchronized plan.
We review the terms of life insurance policies including ownership, beneficiary designations, contestability provisions, and any existing collateral assignments. Understanding the policy details helps determine whether transferring ownership or creating a new policy within the trust is the better approach. We also evaluate whether the current designations align with your wishes and whether changes are necessary to implement an ILIT without unintended tax or administrative complications.
At the outset, we discuss your family structure, potential creditor concerns, desired timing of distributions, and any beneficiaries with special needs. This discussion shapes trust provisions such as discretionary distribution standards, age-based releases, and protective language for creditors. Identifying these goals early ensures the trust document provides clear guidance to trustees and reduces the possibility of disputes or confusion after the grantor’s death.
After deciding to proceed, we draft the ILIT document with precise terms addressing trustee powers, distribution standards, and contingencies. We prepare trust certifications and ownership change forms and coordinate with the insurer to register the trust as policy owner and beneficiary. If gifting is required to fund premiums, we provide documentation templates and instructions for preserving annual exclusion treatment. This step ensures legal formalities are completed correctly to support the trust’s intended tax and administrative outcomes.
We prepare a comprehensive trust instrument tailored to the client’s circumstances, including powers for trustees to manage policy matters and distribute proceeds. We also prepare a trust certification that summarizes key trust provisions for insurance carriers and financial institutions to verify the trust’s existence without disclosing sensitive details. These documents facilitate smooth interactions with insurers and trustees while protecting privacy and ensuring the trust is accepted as legal owner of the policy.
When transferring an existing policy, we coordinate paperwork required by the insurer and advise on timing to avoid contestability or inclusion issues. If the trust will purchase a new policy, we assist with purchase logistics and documentation. We also advise on funding strategies for premium payments, including annual exclusion gifts, and provide templates for gift letters and trustee acknowledgements to create a clear record that supports the intended tax treatment of contributions.
After the trust is in place, ongoing administration includes keeping accurate records of gifts and premium payments, ensuring timely premium payments, and communicating with beneficiaries as directed by the trust. When a claim arises, the trustee files the claim, collects proceeds, and manages distributions according to the trust terms. We assist trustees in understanding their responsibilities, preparing necessary filings, and resolving disputes when they occur, helping ensure the trust functions smoothly during both active administration and after claims are paid.
Trustees should keep a clear record of receipts and disbursements, copies of premium payments, and documentation of any communications with beneficiaries or insurers. Good recordkeeping protects the trust from challenges and demonstrates compliance with gifting and trust terms. Trustees may also need to handle tax filings, provide accountings to beneficiaries, and manage trust assets prudently. Our firm can advise trustees on these responsibilities and provide templates and guidance to make administration more efficient and transparent.
When an insured person dies, the trustee must file a claim with the insurance carrier and present the required trust documentation to collect the proceeds. Once funds are received, the trustee follows the trust’s distribution instructions, whether that means immediate distributions, staged payments, or ongoing support. We assist trustees with claim filing, tax considerations, and distribution decisions to ensure compliance with the trust instrument and state law while working to facilitate timely support for beneficiaries.
An Irrevocable Life Insurance Trust is a trust that owns a life insurance policy and holds the death benefit for named beneficiaries. The grantor transfers ownership of an existing policy into the trust or arranges for the trust to purchase a new policy. The trustee manages the policy, pays premiums using gifts to the trust, and distributes proceeds according to the trust document. The irrevocable nature of the trust means the grantor gives up direct control over the policy, so the trust must be drafted to reflect durable distribution instructions and trustee powers. People create ILITs for reasons such as reducing potential estate inclusion of life insurance proceeds, protecting proceeds from creditors, or controlling how proceeds are used by beneficiaries. Establishing an ILIT involves coordination with the life insurance carrier, careful documentation of funding gifts, and adherence to timing rules. Working with legal counsel helps ensure the trust functions as intended and aligns with the grantor’s broader estate planning goals while complying with federal and state requirements.
Transferring a life insurance policy to an ILIT may remove the policy’s death benefit from the grantor’s taxable estate if done correctly. If the grantor owns no incidents of ownership at their death and the transfer occurred outside the three-year window specified by federal rules, proceeds received by the trust generally will not be included in the grantor’s gross estate for federal estate tax purposes. Properly documenting ownership changes and maintaining forms and records is important to support the trust’s position. However, transfers made within three years prior to death may still be included in the estate under federal law, so timing matters. Additionally, state-specific considerations and the grantor’s total estate value affect overall planning. Coordinating ILIT funding strategies with a tax advisor and the legal team helps ensure gifting practices and trust administration support the intended tax outcomes while preserving flexibility and protection for beneficiaries.
Naming a spouse as a beneficiary of an ILIT is possible, but it requires careful planning to avoid estate inclusion. If the spouse has powers or incidents of ownership over the trust or policy, the proceeds could be pulled back into the estate. To prevent this, grantors may consider alternate structures such as separate trusts or carefully drafted provisions that provide benefits without granting ownership rights that would cause inclusion. Clear drafting ensures the spouse receives intended benefits without unintentionally creating tax exposure. Another approach is to name the spouse as an income or lifetime beneficiary while limiting property rights that would constitute ownership. Family circumstances and estate tax considerations influence the best structure. Discussing goals with legal counsel helps determine whether naming a spouse directly in the ILIT or using complementary documents better achieves the family’s objectives while maintaining the intended protections and tax positions.
The trustee’s duties include maintaining the trust, paying insurance premiums, keeping accurate records of gifts and disbursements, filing required tax returns, and communicating with beneficiaries. The trustee must follow the trust’s terms when making distributions and exercise reasonable care in managing trust affairs. Trustees also coordinate with insurers during ownership transfers and claims processing, ensuring that all documentation is in order when a claim is filed after the insured’s death. Trustees should maintain clear documentation of premium funding to support the intended tax treatment of gifts and ensure the trust operates in line with the grantor’s instructions. If questions or disputes arise, trustees may seek legal guidance. Selecting a trustee who understands fiduciary responsibilities or appointing co-trustees and successor trustees can provide continuity and reduce administrative burden on any single individual.
Annual premium payments are often funded by the grantor making annual gifts to the ILIT that the trustee then uses to pay insurance premiums. To take advantage of the federal gift tax annual exclusion, gifts must be properly documented and, when required, beneficiaries should sign a limited power of appointment or Crummey notice to allow the gifts to qualify as present interest gifts. Maintaining a clear trail of gifts, bank transfers, and trustee acknowledgements supports the position that the gifts were legitimate and properly handled. The trustee should establish a reliable method for receiving and using gifts, such as a dedicated trust account for premium payments and written receipts for each payment. Communicating with the grantor, insurer, and beneficiaries about the premium schedule and gift process helps avoid missed payments and preserves the policy’s effectiveness. Coordination with tax advisors ensures gifting strategies are aligned with broader tax planning goals.
If the insured dies within three years of transferring a life insurance policy to an ILIT, federal tax rules may include the policy proceeds in the grantor’s taxable estate, negating one of the ILIT’s primary benefits. This three-year rule is statutory and applies regardless of the grantor’s intent. For this reason, clients often transfer ownership well in advance of any anticipated end-of-life, or they establish the trust early and have it acquire a new policy, though each option has different practical considerations. Because the three-year rule can affect planning outcomes, establishing an ILIT at an appropriate time is an important part of strategy. Clients should discuss health status, policy transfer timing, and contingency plans with their legal and tax advisors to make informed decisions and reduce the chance that the trust’s intended benefits will be impaired by the timing of a transfer.
An ILIT is irrevocable, which limits the changes a grantor can make unilaterally after formation. However, some modifications may be possible through trustee powers, court approval, or using reserved powers included in the trust instrument at the outset. In certain circumstances, state law provisions such as decanting or court modification may allow changes to address unforeseen problems or changed circumstances. Planning for potential future needs during initial drafting can reduce the need for post-formation modifications. Because options to alter an ILIT after creation are constrained, it is important to anticipate future family, tax, and financial issues when drafting the trust. Including thoughtful successor trustee provisions, mechanisms for appointing advisors, and contingency language can provide flexibility while preserving the trust’s intended protections. Consulting with legal counsel about likely scenarios and creating adaptable yet durable provisions helps ensure the trust remains effective over time.
An ILIT is most effective when coordinated with a revocable living trust, pour-over will, powers of attorney, and health care directives to form a comprehensive estate plan. The ILIT typically focuses specifically on life insurance proceeds, while the revocable trust can address other assets and distribution strategies. A pour-over will can direct any assets not already in trust into the revocable trust, and powers of attorney ensure financial matters can be handled if incapacity occurs. Coordinated documents reduce gaps and conflicting instructions across an estate plan. Coordination also includes aligning beneficiary designations and titling of assets to avoid unintended results such as probate or estate inclusion. Periodic reviews of all estate planning documents ensure that changes in relationships, assets, or laws are reflected across the plan. Working with counsel to review and update documents helps maintain consistency and achieve the client’s overall objectives for asset protection, tax planning, and legacy preservation.
When beneficiaries have disabilities or special needs, an ILIT can be structured to provide support while protecting eligibility for public benefits. Careful drafting of distribution language and coordination with special needs planning tools can help avoid disqualifying beneficiaries from government assistance programs. Trust provisions can limit distributions for specific purposes such as medical care, education, or housing, and can appoint a trustee to manage funds in a way that complements other benefits and supports the beneficiary’s long-term welfare. It is important to coordinate ILIT planning with attorneys or advisors familiar with special needs planning to ensure distributions do not inadvertently impact eligibility. Designing an appropriate interplay between an ILIT and a separate special needs trust, when necessary, helps ensure that beneficiaries receive supplemental support without jeopardizing access to essential public benefits.
To start creating an ILIT in Mission Viejo, contact a qualified estate planning attorney to schedule an initial consultation. Bring current life insurance policies, beneficiary designations, and any existing estate planning documents. During the first meeting, the attorney will review your goals, discuss potential tax and administrative implications, and outline options for transferring ownership or funding a new policy through the trust. This initial assessment clarifies whether an ILIT is the appropriate vehicle for your objectives. If you decide to proceed, the attorney will draft the trust documents, prepare a certification for the insurer, and coordinate any ownership changes with the life insurance carrier. The attorney will also advise on funding strategies for premiums, document gift transfers, and prepare complementary estate planning documents to support your broader plan. Throughout the process, the firm assists with administrative matters and provides guidance to trustees to help ensure the trust functions as intended.
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