Irrevocable Life Insurance Trusts

Affinity will help you create an Irrevocable Life Insurance Trust to ensure that your assets go to your family or designee by preventing your life insurance from being considered part of your estate. Estate taxes can be a surprise for those dealing with the death of a loved one: many are stunned to realize what the IRS and state governments consider to be assets to be taxed. Life insurance proceeds are considered part of the taxable estate unless the insurance policy is planned in certain ways.

One of the best ways to ensure your legacy for your spouse and children is through an Irrevocable Life Insurance Trust. Affinity can help you determine the right trust structure for your life insurance, considering your spouse, children, grandchildren, and other loved ones. A trust can provide you with the control over the policy and how the proceeds are used while providing your heirs with the security of protection from tax surprises. An Irrevocable Life Insurance Trust has many benefits:

  • It can provide cash right away to pay estate taxes and other expenses after death.
  • It reduces estate taxes by removing insurance from your estate.
  • It is an inexpensive way to pay estate taxes.
  • The proceeds of the policy avoid probate and are free from income and estate taxes.
  • It gives you maximum control over the insurance policy and how proceeds are used.
  • It can provide income to spouse without insurance proceeds being included in spouse’s estate.
  • It prevents the courts from controlling insurance proceeds if the beneficiary is incapacitated.

Affinity Law Group attorneys with this focus area:

Tabitha Atwell
Kathleen Bilderback