A common misconception among life insurance policy holders, is that life insurance proceeds are not taxable. This is not true. The truth is that standard life insurance proceeds are taxable as part of a gross estate for estate tax purposes. There is a solution to this, called an Irrevocable Life Insurance Trust (ILIT).
An ILIT can save both you and your beneficiaries from estate taxes. The ILIT keeps life insurance proceeds out of the estate. This can be a huge tax saver. If you are interested in estate tax saving options and other estate planning tools that are valuable and beneficial, contact us at the law office of John M. Gasidlo, Esq.
Our attorney John M. Gasidlo has extensive experience in trusts and ILITs as he has been practicing for 30 years. Schedule an initial free consultation with an experienced Westport irrevocable life insurance trust attorney, by calling 866-761-1956.
Estate Tax Saving Tool: Irrevocable Life Insurance Trust (ILIT)
Many people do not know that life insurance proceeds are taxable. Through an ILIT, people can save on estate taxes for their children and future beneficiaries. An ILIT works by either allowing the ILIT to purchase the life insurance policy or by contributing existing life insurance premiums into an ILIT. Either way, the ILIT now has ownership of the life insurance proceeds, taking them out of the estate. You will be able to determine who the trustee is, as you cannot be the trustee of your own ILIT.
The one downside of an ILIT is that it is an irrevocable trust. That means that in almost all circumstances, you will not be able to change any of the beneficiaries once the ILIT has been established.
Contact a Norwalk ILIT Lawyer
If you are interested in an ILIT and other estate tax saving options, we are here to discuss your options with you. Contact us online or by telephone at 866-761-1956 to speak with an experienced Norwalk, Connecticut, ILIT lawyer.