An Irrevocable Life Insurance Trust (ILIT) can be a powerful tool for individuals and families in Big Bear Lake seeking to manage life insurance proceeds outside of their taxable estate. At the Law Offices of Robert P. Bergman, we work with clients to create durable plans that reflect personal goals, family needs, and California law. Establishing an ILIT requires careful drafting, coordination with life insurance carriers, and ongoing administration to preserve intended benefits. This guide outlines key considerations, typical processes, and how an ILIT can interact with other estate planning documents such as trusts, wills, and powers of attorney.
Selecting and funding an ILIT involves decisions about trust terms, trustee selection, and premium payment arrangements. Many clients use an ILIT to provide liquidity at death to cover estate taxes, debts, or to equalize inheritances among beneficiaries. The trust must be irrevocable to achieve certain tax advantages, which means the grantor gives up ownership and control over the policy. Understanding the tradeoffs and the mechanics of trust administration helps families in San Bernardino County make informed choices. We explain practical steps and common pitfalls for those considering this form of estate planning.
An ILIT offers important benefits for estate planning by keeping life insurance proceeds out of the grantor’s taxable estate and ensuring that policy proceeds are distributed according to the grantor’s wishes. Beyond tax considerations, an ILIT can provide a structured way to help dependent family members, maintain business continuity, and protect proceeds from creditors or unintended claims. Properly designed provisions clarify beneficiary designations, payment timing, and trustee authority, which reduces confusion and family disputes after the grantor’s death. For many families, the trust also offers privacy, since distributions can be handled outside the probate process.
The Law Offices of Robert P. Bergman provides estate planning services to clients in San Jose and surrounding counties, including Big Bear Lake. Our approach emphasizes personalized planning, clear communication, and practical solutions tailored to each client’s circumstances. We assist with drafting trusts, wills, powers of attorney, and all documents that interact with an ILIT. Our team helps clients navigate funding a trust, coordinating beneficiary designations, and updating plans as life changes occur. We prioritize responsiveness and clarity to ensure that clients understand the implications of their planning choices and feel confident in their arrangements.
An Irrevocable Life Insurance Trust is created when the grantor transfers ownership of a life insurance policy into a trust that cannot be revoked. Once the trust holds the policy, the proceeds are generally excluded from the grantor’s estate, which can reduce estate tax exposure and simplify distribution to beneficiaries. Implementing an ILIT requires clear trust language that addresses trustee powers, beneficiary designations, and provisions for paying premiums. Additionally, careful timing and gift tax planning are often necessary to meet legal requirements and avoid inadvertent inclusion of the policy in the estate.
Establishing an ILIT typically involves a series of steps including drafting the trust document, selecting a trustee, transferring ownership or assigning policy proceeds, and creating a funding mechanism for premiums, often through annual gifts to the trust. The grantor must understand the irrevocable nature of the vehicle and the restrictions it imposes. Trustees take on administrative duties such as maintaining records, paying premiums, and making distributions consistent with trust terms. Coordination with financial advisors and insurance carriers helps ensure the trust operates as intended and that premium payments are timely.
An ILIT is a trust designed to own one or more life insurance policies on the life of the grantor or another person. Once established, the trust owns the policy and the insured has given up legal ownership and the ability to modify terms. The trust receives the death benefit and distributes funds according to the trust language, which can provide structured payments, protect assets for beneficiaries, and designate uses such as education or care costs. Precise drafting is essential to accomplish tax objectives, address creditor protection, and ensure the trustee has the authority needed to manage the policy and trust assets.
Key elements of an ILIT include the grantor’s funding instructions, the trustee’s powers, beneficiary designations, and provisions for premium payments. Administrative processes involve transferring policy ownership or designating the trust as beneficiary, documenting gift transfers for premium funding, and maintaining trust records for tax and compliance purposes. Trustees must handle communications with insurers, manage premium payments, and prepare distributions in line with the trust terms. Regular reviews help ensure the trust remains aligned with the grantor’s estate plan and with changes in family circumstances or tax law.
Understanding common terms makes ILIT planning more transparent. Definitions clarify roles and processes such as funding, trustee duties, and beneficiary rights. Knowing these terms helps clients make informed decisions, communicate with trustees and advisors, and avoid mistakes that can undermine the trust’s intended benefits. Below are frequently used terms and short definitions to help you navigate documents and conversations with attorneys, trustees, and financial professionals when creating or administering an ILIT.
The grantor is the person who creates the trust and transfers assets, including life insurance policies, into it. In ILIT planning, the grantor typically gives up ownership rights to the policy to achieve estate planning goals. The grantor’s intent, choices about beneficiaries, and funding strategies shape the trust’s function. Because an ILIT is irrevocable, the grantor surrenders certain control and cannot unilaterally reclaim the property once the transfer is completed. Clear documentation of the grantor’s instructions and intentions is important to ensure the trust operates as planned and to provide guidance to the trustee.
The trustee is the individual or entity responsible for administering the ILIT after it is established. Trustee duties can include paying premiums, managing trust assets, communicating with beneficiaries, and distributing proceeds following trust terms. Selecting the right trustee involves evaluating reliability, financial acumen, and willingness to fulfill ongoing obligations. Trustees must keep accurate records, file appropriate tax forms when necessary, and act in accordance with the trust document and applicable law. The trustee’s decisions impact how well the trust meets the grantor’s objectives and how smoothly benefits are delivered to beneficiaries.
Beneficiaries are the individuals or entities designated to receive distributions from the ILIT when the insured person dies. Trust terms can specify timing, conditions, and purposes of distributions, such as income for living expenses, funds for education, or lump-sum payments. Naming contingent beneficiaries and detailing distribution rules helps prevent disputes and ensures funds are used as intended. Beneficiaries do not own the policy while it is within the ILIT; instead, they have beneficial interests that are realized according to the trust’s provisions after the policy pays out.
Funding refers to the methods used to pay life insurance premiums once the policy is placed in the trust. Common approaches include annual gifts from the grantor to the trust or using trust assets to cover premiums. Proper gift documentation and compliance with gift tax rules are important, especially when using annual exclusion gifts. The trust must have a reliable mechanism to ensure premiums are paid on time to keep the policy in force. Clear funding instructions and coordination with financial advisors help maintain the policy and preserve the intended benefits for beneficiaries.
When considering life insurance within an estate plan, clients can choose between keeping a policy in their individual ownership, naming beneficiaries directly, or placing the policy in an ILIT. Each option has tradeoffs related to control, tax treatment, probate exposure, and creditor protection. Direct ownership maintains control but may include the proceeds in the taxable estate, while an ILIT removes the policy from the estate but limits the grantor’s ability to access or change the policy. Evaluating circumstances such as estate size, family dynamics, and long-term goals helps determine the most appropriate approach.
For individuals whose estate size falls well below federal and state estate tax thresholds, keeping a life insurance policy outside of an ILIT and naming beneficiaries directly can be practical and cost-effective. This approach simplifies administration, maintains grantor control over policy changes, and avoids the formalities of trust setup and funding. When family circumstances are straightforward and the primary aim is to transfer proceeds to a surviving spouse or children with minimal legal complexity, direct ownership with clear beneficiary designations may meet the client’s objectives without the need for an irrevocable trust.
A limited approach can be appropriate for temporary needs or transitional situations, such as maintaining a policy during a period of reorganizing assets or while evaluating long-term planning strategies. If the goal is short-term liquidity for a surviving spouse or to replace income during a specific period, simpler arrangements reduce administrative overhead. It is important, however, to plan for potential future changes so that if circumstances evolve, the policy can be reassessed and transferred into a trust or otherwise integrated into a broader estate plan when appropriate.
For clients with larger estates or complex asset structures, a comprehensive trust-based strategy including an ILIT can preserve estate value and provide liquidity to meet obligations such as taxes, debts, and administrative costs. Removing life insurance proceeds from the taxable estate can be an effective component of broader tax planning. A coordinated approach aligns beneficiary designations, trust provisions, and other planning tools to achieve long-term goals while minimizing the likelihood of unintended tax consequences or family disputes after a grantor’s death.
When beneficiaries include minors, people with special needs, or those who may face creditor claims, a trust-based approach provides structured distribution rules and safeguards. An ILIT can direct funds for specific purposes, create staged distributions, or coordinate with other protective trusts such as special needs or spendthrift provisions. Planning in this way helps ensure that benefit payments support intended uses over time and that beneficiaries receive appropriate oversight and stewardship according to the grantor’s wishes.
A comprehensive approach that incorporates an ILIT with other estate planning documents can enhance predictability and control over how life insurance proceeds are used. By coordinating the ILIT with revocable living trusts, wills, powers of attorney, and advanced health care directives, a plan can address end-of-life decisions, asset distribution, and administrative procedures. This coordination reduces the risk of conflicting beneficiary designations, unintended probate delays, and family disagreements, while providing a clear framework for the trustee to follow upon the insured’s death.
Using an ILIT as part of a broader plan also helps safeguard legacy goals by setting out specific instructions for distributions, successor trustees, and contingencies. The combined use of pour-over wills, trust certifications, and other trust instruments ensures assets flow according to the overall estate plan. This integrated strategy promotes continuity for family members, supports financial security for beneficiaries, and helps protect the grantor’s intentions over the long term, even as circumstances change.
When properly structured, an ILIT can remove life insurance proceeds from a taxable estate, which can preserve wealth for beneficiaries and provide liquidity to cover estate-related obligations. This arrangement helps avoid forced asset sales and ensures that designated heirs receive timely funds. Liquidity created by life insurance proceeds can be especially helpful for business owners, real estate holders, and families with illiquid assets. The trustee’s ability to manage distributions, pay debts, and cover expenses provides stability during the administration period following the grantor’s death.
An ILIT allows a grantor to set conditions and timing for distributions so that funds are used in alignment with long-term intentions. Trustees can be directed to make payments for health, education, maintenance, and support, or to distribute principal at specified ages or milestones. These controls protect beneficiaries from immediate depletion of assets and provide oversight for those who may need assistance managing funds. In combination with other trusts such as special needs trusts or spendthrift provisions, an ILIT can provide layered protection and clarity for future trustees and beneficiaries.
When creating an ILIT, establish a clear premium funding mechanism and document gifts used to pay premiums to avoid tax complications. Annual exclusion gifts are a common approach, but proper recordkeeping is necessary to demonstrate that funds were transferred to the trust and used for premium payments. Clear instructions to trustees about payroll, bank accounts, and gift lines of credit help maintain continuity. Regular communication among the grantor, trustee, and the insurer ensures premiums are applied correctly and the policy remains in force, preserving the purpose and benefits of the trust.
Coordination between beneficiary designations on insurance policies and the trust document is essential to ensure that proceeds flow as intended. Review all related documents, such as wills, revocable living trusts, and retirement plan beneficiary forms, to avoid conflicting instructions that could frustrate planning goals. Periodic reviews following life events like marriage, divorce, births, and deaths help confirm that designations remain current. Clear communication with the insurer and timely updates to policy ownership or beneficiary forms prevent unintended outcomes and reinforce the overall estate planning structure.
Families consider an ILIT when they want to ensure life insurance proceeds are distributed according to specific long-term wishes, to provide liquidity for estate obligations, or to protect inheritances from creditors or divorce proceedings. An ILIT is often part of a multi-document estate plan that includes a revocable trust, will, and powers of attorney. It can be particularly appropriate for high-net-worth individuals, business owners, or those with blended families who desire precise control over how proceeds are used and who receives them. Planning early allows for smoother funding and reduces potential complications later.
Another common reason to establish an ILIT is to preserve family wealth across generations by putting distribution rules in place that reflect the grantor’s values and goals. For example, the trust can support education funds, cover long-term care costs, or maintain a family business without subjecting the proceeds to probate. The structure helps reduce uncertainty and provides a framework for trustees to manage and distribute funds responsibly. Consulting during life allows the grantor to select trustees and tailor provisions to changing circumstances.
Typical circumstances that lead clients to pursue an ILIT include significant life insurance holdings, a desire to reduce estate tax exposure, ownership of illiquid assets that require postmortem liquidity, and concerns about protecting proceeds from creditor claims. Other scenarios include planning for a surviving spouse with separate assets, providing for children from different relationships, funding a buy-sell agreement for a business, or ensuring that funds are available for ongoing care of a dependent. These situations benefit from the structure and predictability an ILIT can provide within a wider estate plan.
For business owners, life insurance held in a trust can fund buy-sell agreements or provide continuity when an owner dies. An ILIT can ensure that proceeds are available to facilitate ownership transfers or to buy out heirs who do not participate in the business. This arrangement helps prevent undue disruption and preserves the business’s operation without forcing liquidation of assets. Proper drafting coordinates the trust with business agreements and ensures funds are disbursed promptly to meet contractual obligations and maintain stability for employees and co-owners.
An ILIT can provide protection for beneficiaries by placing life insurance proceeds beyond immediate reach of creditors or divorce settlements, depending on applicable laws and trust provisions. Trust terms can include spendthrift protections and controlled distribution schedules that reduce the likelihood that assets are lost through lawsuits or marital dissolution. While no arrangement guarantees absolute protection, a thoughtfully structured trust increases the chances that funds remain available for intended beneficiaries and are used for their intended purposes over time.
When beneficiaries include young children or individuals with special needs, an ILIT can provide a framework for long-term support that avoids disqualifying benefits or exposing funds to mismanagement. The trust can specify distributions for medical care, education, and daily living expenses while preserving eligibility for government programs when necessary. Naming successor trustees and including clear distribution standards help ensure continuity of care and financial oversight. This planning gives families assurance that loved ones will have structured support aligned with the grantor’s intentions.
The Law Offices of Robert P. Bergman provides estate planning services to residents of Big Bear Lake and surrounding areas in San Bernardino County. We assist clients in drafting trusts, wills, powers of attorney, and all documents necessary to implement an ILIT and to coordinate it with other planning tools. Our office helps clients navigate state-specific rules and local procedures, ensuring documents reflect California requirements and community circumstances. We welcome inquiries to discuss how an ILIT may fit into your broader plan and to review the practical steps needed to fund and administer the trust.
Clients choose the Law Offices of Robert P. Bergman for clear, practical guidance in estate planning matters that include life insurance trusts. We emphasize personalized solutions that reflect each client’s family dynamics, asset structure, and goals. Our approach involves careful drafting, thorough documentation, and coordination with insurers and financial professionals to implement funding and administration plans. We aim to make the process straightforward, ensuring clients understand the implications of irrevocability and the trustee’s responsibilities so their plans function as intended.
We help clients anticipate future needs by incorporating contingencies and successor provisions into trust documents. Our work includes preparing related documents like pour-over wills, certification of trust forms, and powers of attorney to ensure comprehensive coverage. We can also assist with trust modification petitions, Heggstad petitions, and other filings when changes are needed. Ongoing communication ensures that the plan evolves with life events and legal changes so the trust continues to meet family objectives over time.
Accessible legal counsel and practical administrative support are part of our client service. We discuss trustee selection, funding mechanics, and beneficiary structuring in plain language, and we help prepare the paperwork necessary to transfer ownership and document gifts. For clients who require coordination among multiple advisors, we serve as a central point for organizing documents and timelines. This collaborative approach helps streamline implementation and reduces the risk of oversights that could compromise the trust’s benefits.
Our process begins with an initial consultation to review your goals, existing policies, and family circumstances. We then draft trust documents tailored to those objectives, advise on trustee selection, and coordinate policy transfers or designations with insurers. Once the trust is funded, we assist with administrative setup and documentation for premium funding. Follow-up includes periodic reviews and updates to reflect life changes. Throughout, we provide guidance on recordkeeping and tax reporting matters to help maintain the trust’s intended status and benefits for beneficiaries.
In the first phase we gather information about your assets, existing insurance policies, family situation, and long-term objectives. This review helps determine whether an ILIT is the right tool and identifies what changes, if any, are needed to existing documents and beneficiary designations. We discuss funding strategies for premiums and options for trustee selection. The goal of this step is to develop a clear plan of action that aligns with your priorities and prepares the groundwork for drafting trust documents and coordinating with insurers and financial advisors.
We examine current life insurance policies to determine ownership, beneficiary designations, policy terms, and any restrictions that could affect transfer to a trust. This assessment identifies whether assignment, change of ownership, or new policy issuance is needed. It also reveals potential tax or creditor considerations tied to policy transfers. Understanding these details early allows us to recommend the most practical path forward, including whether to transfer an in-force policy into the ILIT or to issue a new policy within the trust structure.
During planning we draft clear trustee powers and distribution standards tailored to your goals, specifying how and when beneficiaries receive funds and the trustee’s authority to manage policies and trust assets. These provisions address premium payments, emergency distributions, and successor trustee appointment. Well-defined terms minimize ambiguity and guide fiduciary decision-making. By articulating distribution triggers and permissible uses, the trust document helps protect beneficiaries and ensures the grantor’s intentions are honored after the insured’s death.
In the second phase we prepare the trust document, coordinate with insurers to change ownership or beneficiary designations, and set up funding mechanisms for premiums. This stage includes preparing related documents such as pour-over wills, certification of trust forms, and any necessary powers of attorney to manage logistics. If annual exclusion gifts are used to fund premiums, we help document those gifts and advise on recordkeeping to support tax treatment. Communication among all parties ensures the trust is implemented correctly and efficiently.
Once drafted, the trust documents are executed according to California formalities and the policy ownership is transferred or the trust is named beneficiary as appropriate. We coordinate with the insurance carrier to confirm the transaction and obtain confirmations. Proper execution prevents unintended inclusion of proceeds in the taxable estate and ensures that the trust legally holds the policy. We also assist with setting up trust bank accounts and documenting initial funding or funding commitments for premium payments.
After the trust holds the policy, we document and implement the funding plan for premiums and maintain records of gift transfers. This includes annual documentation for exclusion gifts when used and ensuring the trustee follows documented procedures for payments. Ongoing compliance includes keeping trust records, reviewing insurer statements, and updating trusteeship information if needed. These steps reduce risks that could otherwise jeopardize the trust’s intended tax and administrative benefits and provide a clear record for beneficiaries and advisors.
Following implementation, the trustee’s administrative duties include payment of premiums, maintenance of records, communication with beneficiaries, and management of trust assets. Periodic review of the trust and related estate planning documents ensures alignment with changing laws and family circumstances. We offer services to assist trustees with tax filings, distribution decisions, and any necessary trust amendments through appropriate legal processes. Regular check-ins help keep the plan effective and responsive to life events such as births, deaths, marriages, or changes in financial condition.
Trust administration requires attention to accurate recordkeeping, timely premium payments, and maintaining communication among trustees, beneficiaries, and advisors. Trustees should preserve policy statements, bank records, and documentation of gift transfers. Good records support tax filings and demonstrate compliance with the funding plan. When trustees encounter questions about distributions or policy matters, having organized documentation simplifies decision-making and permits efficient consultation with legal counsel or financial advisors to resolve issues in a timely manner.
Life events and changes in law can necessitate updates to estate plans, including related trust documents. Periodic review allows clients to confirm that trustees, beneficiaries, and funding mechanisms remain appropriate. While an ILIT is irrevocable, related aspects of an overall plan may be updated where permitted or addressed through new trusts or actions. Regular reviews help ensure the plan remains responsive to a client’s goals and helps identify possible needs for coordination with other planning vehicles like retirement plan trusts, Heggstad petitions, or trust modification petitions.
An Irrevocable Life Insurance Trust is a trust set up to own and receive the proceeds of life insurance policies. Once the policy is transferred into the trust, the grantor no longer owns the policy and the proceeds generally pass to the trust outside of probate. The trust document specifies how proceeds will be distributed and who will act as trustee. This arrangement can serve multiple objectives such as providing liquidity to pay estate obligations, protecting payouts for beneficiaries, and coordinating distributions with broader estate planning goals. Establishing an ILIT requires careful drafting and coordination with the insurance company to transfer ownership or name the trust as beneficiary. The trust must be irrevocable at the time of transfer to achieve common estate planning objectives tied to exclusion from the grantor’s taxable estate. Trustees then manage the policy, pay premiums as directed, and distribute proceeds according to the trust terms, with documentation maintained to support tax and administrative compliance.
Transferring a policy to an ILIT does limit the grantor’s control over that policy because ownership and decision-making authority are vested in the trustee once the transfer is complete. The grantor cannot unilaterally change ownership or revoke the trust terms. However, the grantor can structure the trust with detailed instructions and naming trusted individuals as trustees to ensure administration aligns with their intentions. Careful planning at the outset helps balance the loss of direct control with the long-term benefits the trust is intended to provide. It is important to consider the irrevocable nature of the vehicle before transferring ownership. If flexibility is needed, other planning tools or trust features may be used to address contingencies. Discussing available options and potential consequences with legal counsel helps ensure the chosen structure matches the grantor’s priorities and provides realistic expectations about who will make decisions after the transfer.
Premiums for a policy held by an ILIT are commonly funded through gifts from the grantor to the trust, which the trustee then uses to pay the insurer. Annual exclusion gifts are frequently used to avoid gift tax implications, and proper documentation of these gifts is essential. The grantor may make gifts directly to the trust or to beneficiaries with instructions, depending on the funding approach, and trustees should keep detailed records of all transactions to maintain clarity and compliance. Alternative funding approaches include using trust assets if the trust has other funds, or structuring the policy purchase within the trust so premiums are paid from trust-owned resources. Whatever method is chosen, coordinating with financial advisors and maintaining accurate records helps ensure premiums are paid on time and the policy remains in force, preserving the intended benefits for beneficiaries.
Once an ILIT is created and funded, its terms are generally irrevocable, meaning the grantor cannot unilaterally change beneficiaries or replay ownership like they could with an individually owned policy. However, some planning techniques and legal processes may allow adjustments in limited circumstances, such as appointing a successor trustee or pursuing a trust modification petition when permitted by law. These pathways depend on the trust language, state law, and the nature of the requested change. Because modifications can be limited, it is important to draft the trust with thoughtful provisions and contingency plans. Regular reviews and coordination with estate planning counsel make it easier to address evolving family needs while respecting the legal constraints of an irrevocable arrangement. When changes are necessary, legal steps can sometimes be taken to accomplish them in a manner consistent with both legal rules and the grantor’s overarching objectives.
Common trustee responsibilities include paying premiums, maintaining trust records, communicating with beneficiaries, and managing trust assets according to the trust’s terms. Trustees must keep accurate documentation of gift transfers used to fund premiums, maintain contact with the insurer, and ensure that policy and trust statements are preserved for tax and administrative purposes. Trustees may also handle distribution requests, make decisions under the directions set by the trust, and coordinate with legal or financial advisors when complex issues arise. Trustees should act prudently, maintain transparency with beneficiaries, and follow the trust document closely. When trustees encounter complex issues, such as tax filings or disputes among beneficiaries, they should seek legal and financial guidance to fulfill their duties responsibly. Clear recordkeeping and consistent communication help ensure smooth administration and preserve the trust’s intended benefits for the beneficiaries.
An ILIT can help reduce federal estate tax exposure by removing life insurance proceeds from the grantor’s taxable estate, provided the trust and transfers are structured correctly. California does not currently impose a separate state estate tax, but federal estate tax considerations remain relevant for larger estates. Proper timing of transfers and adherence to gift tax rules are important to achieve the intended tax treatment and avoid unintended inclusion of proceeds in the estate. Planning to reduce tax exposure involves coordinating the ILIT with the rest of the estate plan and documenting gift transfers used to fund premiums. Early planning and careful implementation help preserve tax benefits. Consulting with tax advisors and legal counsel ensures the trust is drafted and administered in a way that aligns with current tax laws and the client’s financial objectives.
If a policy is transferred to an ILIT shortly before the insured’s death, special timing rules may cause the proceeds to remain included in the insured’s estate. Federal rules include a transfer-for-value lookback period that can result in estate inclusion if the transfer occurs within a specific number of years before death. For this reason, timing matters when implementing an ILIT, and transfers should be planned to avoid unintended tax consequences. Early planning reduces the risk that the trust will fail to achieve its intended goals. When transfers occur close to the time of death, careful documentation and analysis are necessary to understand the potential consequences. In some cases, alternate planning strategies or adjustments to beneficiary designations may be considered, but these can be complex and time-sensitive. Seeking legal guidance promptly helps clarify options and minimize adverse outcomes for beneficiaries.
An ILIT can offer protections that decrease the likelihood proceeds are subject to creditor claims or divorce settlements, depending on the trust’s terms and applicable law. Provisions such as spendthrift language and controlled distribution schedules help limit access to funds, which can reduce vulnerability to creditor collection or claims in marital proceedings. However, no arrangement guarantees absolute protection in every situation, and outcomes depend on timing, jurisdictional rules, and the specifics of each case. Because protections are fact-sensitive, careful drafting and planning are essential to maximize the potential benefits. Consulting with counsel familiar with creditor and family law issues helps craft trust provisions that align with the grantor’s protective intentions while complying with California law. Periodic reviews help ensure trust terms remain effective in light of changes in beneficiary circumstances or legal developments.
An ILIT and a revocable living trust serve different functions but can complement one another in a unified estate plan. A revocable living trust holds assets that the grantor retains control over during life and may be amended as circumstances change, while an ILIT holds life insurance policies in an irrevocable structure designed to achieve specific tax and creditor protections. Coordinating beneficiary designations and pour-over provisions ensures that assets flow as intended and that life insurance proceeds are handled consistently with broader planning goals. Working with legal counsel to align trust terms, successor trustee appointments, and distribution instructions helps prevent conflicts and duplicate beneficiary designations. Clear coordination ensures that proceeds from an ILIT are used in the context of the overall estate plan, whether to fund inheritances, support a surviving spouse, or provide liquidity for administrative obligations, while maintaining the protective and tax-related benefits the ILIT provides.
You should review your ILIT and related estate documents after major life events such as marriage, divorce, births, deaths, or significant changes in financial circumstances. While an ILIT is irrevocable, related documents and planning choices may need updates, such as successor trustee appointments or coordination with newly acquired assets. Periodic review ensures that all aspects of the estate plan remain aligned with your current objectives and that trustee and beneficiary information is current and accurate. Regular reviews also allow for adjustments in funding strategies, whether due to changes in income, gifts, or insurance policies. Consulting legal counsel and financial advisors periodically helps identify necessary updates and ensures recordkeeping and compliance procedures are maintained. These proactive steps reduce the risk of unintended outcomes and support continued effectiveness of the overall 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