An Irrevocable Life Insurance Trust (ILIT) can be an effective component of a thoughtful estate plan, especially for families in Garden Acres concerned about life insurance proceeds, estate tax exposure, and orderly transfer of wealth. At the Law Offices of Robert P. Bergman, our focus is helping local residents evaluate whether an ILIT aligns with their overall planning goals. This guide explains how an ILIT works, what benefits it can provide, and important considerations when funding and administering the trust. We aim to give clear information so you can make informed choices about protecting family assets and providing for beneficiaries.
Choosing to establish an ILIT is a significant decision that involves legal structure, trust terms, trustee selection, beneficiary designations, and coordination with other estate planning documents like wills, powers of attorney, and trust certificates. In San Joaquin County and throughout California, state and federal rules influence how insurance proceeds are treated for estate and tax purposes. This page describes practical steps, common scenarios where an ILIT is beneficial, and how it interacts with documents such as pour-over wills, financial powers of attorney, advance health care directives, and trust certifications to create a cohesive plan tailored to your family’s needs.
An ILIT can remove life insurance proceeds from a taxable estate, preserve liquidity for beneficiaries, and set clear rules for distribution and use of policy funds. For individuals with meaningful life insurance coverage, placing the policy in an ILIT helps reduce the risk of estate inclusion and potential estate tax consequences. The trust can also protect proceeds from probate delays and ensure that beneficiaries receive funds according to your wishes rather than through intestacy rules. Establishing an ILIT requires careful drafting and coordination with other documents like a trust certification and pour-over will to ensure the trustee can manage funds promptly and effectively.
The Law Offices of Robert P. Bergman in the Bay Area assist clients with estate planning matters including revocable living trusts, wills, powers of attorney, and irrevocable life insurance trusts. Our approach centers on providing clear, practical guidance tailored to the needs of families and individuals in Garden Acres and San Joaquin County. We work to coordinate policies, trust documents, and related filings so that each client’s plan functions as a cohesive whole. If you need assistance understanding how an ILIT fits into your broader planning objectives, we can review your situation and propose draft language and implementation steps that reflect your intentions.
An ILIT is a trust created to own life insurance policies so that policy proceeds are managed outside the insured’s taxable estate and distributed according to the trust’s terms. The trust is irrevocable, meaning the grantor typically cannot change beneficiaries or reclaim ownership once properly funded. Trustees administer the policy, handle premium payments if provided by the trust, and distribute proceeds to named beneficiaries under the rules you set. Proper implementation requires precise timing and funding, including transferring an existing policy or having the trust purchase a new policy, while considering gift tax and three-year estate inclusion rules under federal law.
Because an ILIT is irrevocable, it’s important to consider the long-term implications before creating one. The trust must be carefully drafted to avoid unintended estate inclusion and to provide clear authority for the trustee to manage and collect insurance proceeds. Coordination with beneficiary designations, certification of trust, and any existing retirement plan trust or irrevocable life insurance trust documents helps ensure that proceeds pass according to your intentions. Trustees should also understand responsibilities related to premium payments, record-keeping, and communicating with beneficiaries to reduce the likelihood of disputes after a life insurance payout.
An Irrevocable Life Insurance Trust is a separate legal entity that owns life insurance policies and administers their proceeds for the benefit of the trust’s beneficiaries. The trust document specifies who may receive funds, when distributions occur, and any conditions or protections the grantor desires. Key features include irrevocability, trustee authority, and provisions addressing premium payment and distribution timing. A properly funded ILIT can offer creditor protection for beneficiaries in certain circumstances and may prevent life insurance proceeds from having to pass through probate, enabling faster access to liquidity when beneficiaries need it most.
Establishing an ILIT usually involves drafting the trust instrument, selecting a trustee, determining beneficiaries, transferring or assigning an existing policy to the trust, and addressing premium funding. For new policies, the trust purchases the policy and the grantor makes gifts to the trust to cover premiums, often using Crummey withdrawal powers to qualify the gifts for the annual gift tax exclusion. If an existing policy is assigned to the trust, attention must be paid to the three-year lookback rule to avoid estate inclusion. Ongoing administration includes tax filings, distribution management, and clear documentation so that the trustee can meet fiduciary responsibilities.
Understanding common terms makes it easier to navigate ILIT planning discussions. Below are concise explanations of frequently used terms so you can follow drafting decisions, fiduciary duties, and interactions with other documents like wills and powers of attorney. These definitions aim to clarify how insurance ownership, gifting, and trust administration affect estate planning outcomes and beneficiary access to proceeds. If you encounter any unfamiliar terms during meetings or document review, ask for plain-language clarification and examples illustrating how the concept applies to your plan.
The grantor is the person who creates and funds the trust by transferring assets or arranging for the trust to own life insurance. In an ILIT context, the grantor typically transfers ownership of a life insurance policy into the trust or arranges for the trust to purchase a new policy. Once the transfer is completed and the trust is irrevocable, the grantor gives up the ability to change beneficiaries or reclaim trust assets. Understanding the grantor’s role helps clarify limitations on amendment and revocation and the reasons an irrevocable structure is chosen to achieve specific estate planning goals.
The trustee is the individual or institution appointed to administer the trust in accordance with its terms. Responsibilities include managing policy ownership, paying premiums if the trust is funded for that purpose, filing required tax returns, and making distributions to beneficiaries under the trust’s provisions. Trustees must act in the beneficiaries’ best interests and keep accurate records. Choosing a trustee who is comfortable with administrative duties and communication helps avoid delays and conflicts when insurance proceeds are paid out and distributions must be made.
A beneficiary is someone designated in the trust to receive proceeds or other trust benefits according to the trust’s terms. Beneficiaries can be individuals, charities, or entities and may receive immediate distributions, staged payments, or managed disbursements for specific purposes such as education or health care. Defining beneficiary classes and distribution standards clearly in the trust reduces ambiguity and potential disputes. The trust document can also include provisions for successor beneficiaries and contingencies if a named beneficiary predeceases the trust’s funding event or death of the insured.
A Crummey withdrawal right is a temporary ability given to trust beneficiaries to withdraw a gift contributed to the trust, used primarily to qualify gifts for the annual gift tax exclusion. These limited withdrawal rights must be communicated to beneficiaries and are typically brief; the expectation is that withdrawals are uncommon, but the notice preserves exclusion treatment for premium gifts. Properly implemented Crummey powers require clear notice procedures, documentation of nonwithdrawal if beneficiaries choose to leave funds in the trust, and careful drafting to meet IRS guidance on gift tax exclusions and trust contributions.
When weighing an ILIT against alternatives such as leaving a policy in your estate or naming beneficiaries directly, consider tax implications, probate avoidance, creditor protection, and control over distribution. Placing a policy in an ILIT can keep proceeds out of the taxable estate and provide managed distributions, but it involves relinquishing ownership and control. Keeping a policy in your estate is simpler but may expose proceeds to estate taxes and probate delays. A pour-over will can coordinate assets into a revocable trust but does not replace the specific benefits an ILIT provides for life insurance proceeds.
For individuals whose life insurance coverage is modest relative to their overall estate and who do not face significant estate tax exposure, leaving a policy outside of an ILIT may be acceptable. In such cases, beneficiary designations and a clear will or revocable trust can provide straightforward transfer of benefits without the administrative overhead of an irrevocable trust. It is still important to coordinate beneficiary designations with other estate planning documents and to confirm that designated recipients are correctly identified to avoid unintended distribution or probate complications upon an insured’s death.
If you value a simple arrangement and prefer to retain flexibility to change ownership or beneficiaries, a limited approach such as naming recipients directly or using a revocable trust may be more appropriate. A revocable trust allows changes during your lifetime and can avoid probate for many assets, but it does not offer the same exclusion for life insurance proceeds as an ILIT. The tradeoff between simplicity and potential tax or creditor protection should be evaluated in light of family needs, the size of the insurance benefit, and long-term planning objectives.
A comprehensive approach ensures the ILIT works in harmony with retirement plan trusts, revocable living trusts, pour-over wills, powers of attorney, and health care directives. Retirement accounts and certain beneficiary designations can have tax or creditor implications that interact with insurance planning; addressing these relationships during drafting and funding reduces the risk of unintended consequences. Coordinated planning helps you set consistent distribution standards and identify whether additional documents like a certification of trust or general assignment to trust are needed to establish authority for trustees and trusteeship processes.
Funding an ILIT often involves gifting to the trust to cover premiums, and those gifts may require careful handling to preserve annual exclusion treatment. Using withdrawal powers, documenting notices to beneficiaries, and understanding the three-year transfer rule that may pull proceeds back into the taxable estate are all parts of implementation that benefit from full planning. A comprehensive process will also consider whether to assign an existing policy or issue a new one in the trust’s name and how to structure trustee authority and administrative provisions to reflect your long-term intentions.
Taking a comprehensive view reduces the risk of conflicting beneficiary designations, unintended tax consequences, and administrative delays. When life insurance planning is integrated with documents such as revocable living trusts, wills, powers of attorney, and health care directives, family members and trustees have clearer guidance. This integration also enables efficient funding strategies that safeguard eligibility for exclusions and limits potential estate inclusion. A unified approach provides more predictable outcomes and smoother administration when the insured passes away, helping beneficiaries access necessary funds with minimal delay.
Comprehensive planning also supports continuity of decision-making by designating successor trustees and naming guardianship nominations if appropriate, which is particularly important for families with minor children or beneficiaries with special needs. Clear trust provisions for distribution timing, uses for proceeds, and documentation expectations help the trustee act consistently with your intentions. Thoughtful coordination with retirement plan trusts, irrevocable life insurance trust provisions, and any existing special needs or pet trusts ensures your legacy goals are preserved and aligned across all instruments.
One of the primary benefits of a comprehensive ILIT plan is minimizing the chance that life insurance proceeds will be included in the insured’s taxable estate. By placing ownership of the policy in an irrevocable trust and following best practices for funding, a well-structured ILIT can reduce estate tax exposure and preserve more value for beneficiaries. Careful attention to transfer timing, gift tax rules, and documentation is necessary to secure these benefits, and combining the ILIT with other estate planning tools makes it easier to achieve a cohesive and tax-efficient outcome.
An ILIT provides precise control over how life insurance proceeds are used and disbursed, allowing the grantor to set conditions or stages for distributions, protect funds from creditors, and provide ongoing financial support when appropriate. This can be particularly useful for families with young beneficiaries, people with special needs, or situations where you want to preserve funds for long-term care, education, or business succession. Clear drafting ensures the trustee has authority to follow your distribution plan and to act quickly when proceeds are payable.
Before transferring a policy to an ILIT, verify current ownership and beneficiary designations to avoid conflicts that could undermine the trust’s intent. Check whether your existing policy allows assignment, whether there are loans against the policy, and whether transfer rules or contestable periods apply. It is also important to coordinate the trust document with any beneficiary designations on retirement accounts and insurance contracts so that the ILIT functions as intended. Clear documentation and proactive communication help prevent delays and administrative disputes.
Choose a trustee who understands fiduciary duties and is willing to manage insurance administration, record-keeping, and communication with beneficiaries. The trustee’s responsibilities include handling premium payments when funds are available, managing claims and distributions, and providing regular accounting. Naming successor trustees and including clear guidance for decision-making reduces the risk of disputes. Consider whether a family member, trusted friend, or professional fiduciary is best suited to carry out the trust’s terms and to act promptly when insurance proceeds become payable.
Consider an ILIT if you have significant life insurance coverage and want to keep proceeds out of your taxable estate, provide structured distributions to beneficiaries, or shield funds from probate delays. Families facing potential estate tax exposure, business owners needing liquidity for succession planning, and individuals seeking to provide for heirs with specific financial needs may benefit from the protections an ILIT offers. The decision should follow a careful review of your overall financial picture, retirement accounts, and family dynamics to ensure the trust’s structure supports your long-term intentions.
You might also consider an ILIT if you want to control how and when beneficiaries receive proceeds, protect assets for young beneficiaries, or provide for legacy gifts and charitable distributions. Coordination with other instruments such as a revocable living trust, pour-over will, retirement plan trust, and health care directives ensures consistency across your plan. Discussing the tradeoffs between control, tax treatment, and loss of ownership flexibility will help you decide whether an ILIT is the right component in your estate planning toolkit.
ILITs are often used in situations where estate tax exposure is a concern, where beneficiaries require structured distributions, or where policy proceeds could be subject to probate or creditor claims. Business owners use ILITs to provide liquidity for buy-sell agreements, parents use them to provide for minor children, and people with complex asset portfolios use them to preserve value for intended heirs. The trust can be tailored to address needs such as special needs provisions, pet trusts, or charitable designations to ensure proceeds are used according to your intentions.
When life insurance coverage represents a significant portion of your assets, using an ILIT can prevent the policy proceeds from increasing the value of your taxable estate. This approach is helpful in preserving wealth for heirs by reducing potential estate tax liability. Proper timing and transfer mechanics are important to avoid estate inclusion under the three-year rule, so transfers should be planned with attention to timing and documentation. Working through funding strategies and coordinating with retirement plan trusts and other documents helps secure intended tax outcomes.
Probate can create delays and public exposure for assets distributed at death. By placing a life insurance policy in an ILIT, proceeds are generally payable directly to the trust and distributed according to its terms, which can avoid probate administration for those funds. This provides beneficiaries with quicker access to liquidity and reduces the administrative burden that can arise when insurance proceeds are controlled by probate court processes. A clearly drafted trust and proactive trustee planning help expedite claims and distributions.
An ILIT allows you to set parameters for how proceeds will be used over time, making it a strong option when beneficiaries may need ongoing support or when you want to protect funds from creditors or poor financial decisions. Trust provisions can specify staged distributions, payments for education or health care, or retention of funds under trustee management. This level of oversight can be particularly valuable for vulnerable beneficiaries or those who may not be ready to manage a large, immediate payout, balancing protection with access to necessary resources.
The Law Offices of Robert P. Bergman serve residents of Garden Acres and surrounding communities with estate planning services tailored to local needs. We provide guidance on setting up irrevocable life insurance trusts, coordinating those trusts with revocable living trusts and wills, and preparing supporting documents such as financial powers of attorney, advance health care directives, and certifications of trust. Our goal is to help clients craft plans that reflect family priorities and practical realities while maintaining clear documentation and straightforward administration procedures for trustees and beneficiaries alike.
Our firm focuses on delivering personalized estate planning guidance that aligns with each client’s goals for asset protection and legacy planning. We help clients evaluate whether an ILIT makes sense based on asset composition, family circumstances, and long-term objectives. Our process emphasizes clear communication, careful drafting, and coordination with other estate planning instruments so your plan functions cohesively. For clients in Garden Acres and San Joaquin County, we provide practical recommendations about trustee selection, funding strategies, and documentation that support smooth administration.
We assist with all technical and administrative steps related to an ILIT, including drafting the trust document, preparing notices for Crummey powers when appropriate, coordinating insurance assignments or new issuances, and outlining trustee responsibilities. We also help integrate ILIT provisions with related documents like pour-over wills, retirement plan trusts, and guardianship nominations when needed. By addressing these items up front, clients gain greater confidence that their wishes will be carried out consistently and efficiently when the time comes for distributions or trustee actions.
Clients appreciate practical, thorough planning and transparent explanations of the tradeoffs involved in choosing an ILIT. We help you weigh alternatives such as leaving policies in your estate or using beneficiary designations, and we recommend structures that meet your goals for control, tax planning, and protection of beneficiaries. If you have questions about life insurance trust strategies, trustee duties, or required notices and filings, we can review your situation and present clear options so you can decide with confidence and peace of mind.
Our process begins with an initial review of your assets, existing insurance policies, and estate planning documents to determine whether an ILIT is appropriate. We then draft the trust instrument, advise on trustee selection, and coordinate policy transfers or new policy purchases. We prepare necessary notices and documentation for premium funding and gift treatment, and we provide written instructions and checklists for trustees to follow upon the insured’s death. Throughout the process we answer questions and revise documents to reflect changes in family circumstances or financial plans.
The first stage is an in-depth review of your financial profile, insurance holdings, and estate documents to define objectives for an ILIT. We analyze whether transferring an existing policy or issuing a new policy in the trust’s name best meets your goals, and we outline funding methods to cover premiums while considering gift tax consequences. This stage also includes discussing trustee options, beneficiary designations, and how the ILIT will coordinate with revocable living trusts, pour-over wills, and retirement plan trusts already in place.
Collecting accurate information about current policies, beneficiary designations, and existing estate planning documents is essential. We review policy terms, any outstanding loans, premium schedules, and contestability periods, and we verify that assignments or transfers are permissible under the insurer’s rules. This foundational step helps determine whether the ILIT will be funded with a transfer of ownership or by having the trust purchase a new policy, and it ensures that funding and notice procedures can be implemented in a way that supports tax and administrative goals.
Once we understand assets and policy details, we draft trust provisions that reflect your distribution preferences and provide clear authority for trustees. Funding options are presented and evaluated, including using Crummey withdrawal powers to secure annual gift tax exclusion treatment where appropriate. We also prepare coordination language for related documents such as certifications of trust and pour-over wills so all components of your plan operate cohesively. Clear language reduces ambiguity for trustees and beneficiaries after the insured’s death.
After drafting, we finalize the trust document, complete any necessary assignments of existing policies, and assist with the purchase of new policies if that approach is chosen. We prepare and document gifts to the trust for premium payment, provide notice procedures for any withdrawal powers, and confirm that the trust is properly funded to carry out its intended purpose. This stage also includes delivering copies of the trust and relevant instructions to trustees so they understand their obligations and how to manage premium payments and claims.
Execution requires proper signing and witnessing according to California formalities, and we help prepare required notices for beneficiaries when withdrawal rights are used. Proper documentation of these notices and the beneficiaries’ responses is key to preserving gift tax treatment and avoiding future disputes. We also coordinate with the insurer to update policy ownership records or to issue a new policy in the trust’s name, ensuring the trust is recognized as the owner and beneficiary where intended.
Once the trust is signed and the policy ownership established, we confirm that funding mechanisms are in place to cover premiums, and we deliver clear trustee instructions about accounting, claim procedures, and distribution standards. We prepare a certification of trust if helpful for third parties to verify trustee authority without disclosing trust terms. These materials make it easier for trustees to act promptly and in accordance with your wishes when the time comes for administration or distributions.
After the ILIT is implemented, regular review ensures that the trust continues to reflect changing circumstances. Periodic check-ins may be needed to confirm premium payment arrangements, verify beneficiary information, and update related estate documents like pour-over wills or powers of attorney. Trustees may need guidance on filing any required tax returns and keeping accurate records of premiums and distributions. Ongoing attention reduces the risk of administrative problems and helps the trust remain aligned with your estate planning goals.
Annual or periodic reviews help ensure premiums are paid, beneficiaries remain current, and trustee records are complete. Maintaining detailed records of gifts, notices, premium payments, and communications with beneficiaries supports transparency and simplifies administration. These practices also make it easier to address questions from trustees or family members and reduce the likelihood of disputes or tax complications. We can assist with scheduled reviews and provide checklists to help trustees fulfill their responsibilities effectively over time.
Life changes such as births, deaths, marriages, or changes in financial circumstances may prompt updates to related estate documents even though the ILIT itself is irrevocable. We recommend reviewing the overall estate plan when significant life events occur to confirm that the ILIT’s structure and coordinating documents still reflect your wishes. While an irrevocable trust cannot be easily modified, related instruments and funding arrangements can be adjusted to maintain alignment with overall objectives, and we can advise on appropriate steps to preserve intended benefits.
An Irrevocable Life Insurance Trust is a trust that owns one or more life insurance policies and holds policy proceeds for the benefit of named beneficiaries according to the trust’s terms. By transferring ownership to the trust, the policy proceeds may be kept out of the insured’s taxable estate, provided transfers are completed in accordance with applicable rules. The trust document defines trustee powers, beneficiary rights, distribution timing, and any conditions you want to impose to manage proceeds after the insured’s death. The trust is irrevocable once properly funded, meaning the grantor generally cannot change the trust terms or reclaim the assets. Trustees administer the policy, manage premium payments if funds are provided, and collect proceeds when the insured passes. Establishing an ILIT requires attention to funding mechanics, beneficiary notices when applicable, and coordination with other estate planning documents to ensure the desired outcomes are achieved.
An ILIT can reduce estate taxes by keeping life insurance proceeds out of the insured’s taxable estate when properly structured and funded. If the policy is owned by the trust and the insured has not retained incidents of ownership, proceeds paid to the ILIT typically are not included in the taxable estate. However, timing matters; transfers made within three years of death or transfers where the grantor retains certain rights can cause proceeds to be included. Careful planning and adherence to rules around gifting and ownership are essential. Because federal estate tax thresholds and individual circumstances vary, an ILIT’s effectiveness depends on your overall estate composition and tax exposure. Coordination with retirement plan planning and other trust documents can strengthen the overall strategy to preserve value for beneficiaries. A review of your complete financial picture helps determine whether an ILIT is a beneficial tool for reducing potential estate taxes.
Transferring an existing policy into an ILIT is commonly done, but it requires consideration of policy terms, outstanding loans, and timing rules that may affect estate inclusion. If the insured transfers ownership to the trust, the transfer must be handled carefully and documented, and the three-year lookback rule may cause proceeds to be included in the taxable estate if transfer occurs shortly before death. Reviewing the policy’s assignment provisions and any lender obligations is an important early step. Sometimes a new policy issued in the trust’s name is preferable, depending on underwriting, policy age, and cost. Each option has different administrative and tax implications, and we evaluate the relative benefits and risks to recommend a strategy that aligns with your objectives and reduces the potential for unintended consequences.
Choosing a trustee involves balancing trustworthiness, administrative ability, and willingness to perform fiduciary duties. A trustee may be a trusted family member, friend, or a professional fiduciary; what matters is that the person or entity understands the responsibilities of managing premiums, handling claims, keeping records, and communicating with beneficiaries. Naming successor trustees helps ensure continuity of administration if the initial trustee is unable or unwilling to serve. Consider whether the trustee will need assistance from financial institutions or investment managers and whether they are comfortable making distribution decisions according to the trust’s terms. Clear instructions within the trust document and a certification of trust for third parties can simplify interactions with insurers and financial institutions and help trustees act with confidence.
Premiums for a policy owned by an ILIT are typically funded by gifts from the grantor to the trust, by trust assets, or by other arrangements specified in the trust document. Many ILITs use annual gifts covered by the federal annual gift tax exclusion, often coupled with withdrawal rights for beneficiaries, to fund premiums while maintaining favorable tax treatment. Careful documentation of gifts and notices to beneficiaries is necessary to support exclusion claims and to maintain clarity in records. If the trust lacks sufficient liquid assets to pay premiums, the policy could lapse or require alternative funding, so planning for premium payments at the outset is important. Trustees should keep accurate records of premium payments and gifts, file any required returns, and follow the trust’s procedures for using trust funds to ensure uninterrupted coverage and proper administration of the policy.
The three-year rule generally provides that if an insured transfers ownership of a life insurance policy and then dies within three years of that transfer, the proceeds may be included in the insured’s taxable estate. This lookback period is designed to prevent last-minute transfers intended to avoid estate tax inclusion. Because of this rule, transfers to an ILIT require advance planning to ensure the intended estate tax benefits are realized, and immediate transfers shortly before death may not achieve the desired outcome. Understanding the three-year rule is essential when deciding whether to assign an existing policy to a trust or to have the trust purchase a new policy. If timing is a concern, alternatives may be considered and explained so you can choose an approach that reflects both your objectives and realistic timelines for implementation.
An ILIT should be coordinated with your revocable living trust, pour-over will, and other estate planning documents so that beneficiary designations and asset flow are consistent. While a revocable trust can hold many assets and provide flexibility during your lifetime, it does not offer the same ownership structure for life insurance as an ILIT. Ensuring that the ILIT’s terms and beneficiary designations align with your overall plan reduces the risk of conflicting instructions or unintended distributions. A pour-over will often directs residual assets into a revocable trust at death but does not replace the role of an ILIT for life insurance ownership. We review all documents together and recommend edits or coordination language, such as certification of trust or assignment documentation, so trustees, insurers, and financial institutions can verify authority and administer assets according to your integrated plan.
Whether beneficiaries can access funds immediately depends on how the ILIT’s distribution provisions are written and how quickly the trustee can process the claim. Some trusts provide for prompt payment to cover funeral expenses or immediate liquidity needs, while others stage distributions over time or tie distributions to specific purposes like education. Clear instructions in the trust for emergency distributions or short-term loans can help beneficiaries access needed funds without delay. The trustee’s ability to act quickly also depends on having clear documentation, a certification of trust, and readily available records to submit claims to the insurer. If the trustee has good instructions and an efficient process for handling claims and accounting, proceeds can often be made available promptly in accordance with the trust’s terms and the insurer’s procedures.
An ILIT imposes ongoing responsibilities such as record-keeping, communicating with beneficiaries, maintaining premium payment arrangements, and preparing any required tax filings. Trustees should maintain accurate records of gifts, notices, premiums paid, and distributions made, and follow the trust’s procedures for reporting and accounting. Regular reviews help ensure premiums continue to be paid and that beneficiary designations and personal information remain current. Because the trust is irrevocable, updates to beneficiaries and terms are limited, but coordinating related documents such as powers of attorney and health care directives may be necessary as life circumstances change. Periodic professional review can help identify administrative tasks and ensure the trust remains aligned with overall estate planning goals.
To begin setting up an ILIT with our firm, start with a consultation where we review your insurance policies, estate documents, and planning objectives. We will discuss whether transferring an existing policy or issuing a new policy in the trust’s name is preferable, outline funding strategies for premiums, and explain trustee and beneficiary considerations. From there we prepare draft trust documents and walk you through execution and funding steps. We provide checklists for required documents, coordinate with insurers when assignments or new policy issuances are needed, and prepare notices and trustee instructions to support proper administration. Contact the Law Offices of Robert P. Bergman to schedule an initial review so we can assess your situation and propose a tailored implementation plan for an ILIT.
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