Estate Planning as a Career

The primary objective of an irrevocable life insurance trust (ILIT) is to remove the life insurance proceeds from appearing in the insured owner’s estate assets. Therefore, when the ILIT testamentary document is drafted, it should be ensured that the insured does not retain or hold any life insurance policies whose mention appears therein. Moreover, the insured should not possess any powers over the ILIT or its trustee that would result in the life insurance policy or the ILIT being included in the insured owner’s estate for tax purposes.

The ILIT bestows several other advantages to the estate owner. Some of these are described below.

Minimize the tax consequences of the three-year rule: Under certain circumstances a married grantor of the ILIT can minimize the payment of estate taxes associated with his estate assets. These circumstances include the case in which a married grantor, who has transferred a life insurance policy to the ILIT, dies within three years of the transfer. In such a case, the policy is included in the grantor’s estate. Further, the trustee can hold or pay the life insurance proceeds in such a way that qualifies for estate tax marital deduction.

If the marital deduction trust is a general power of appointment under section 2056(b)(5) of the ILIT rules, the following holds true. The surviving spouse can then be granted the right to withdraw the principal amount of the insurance proceeds and use it to make gifts to the deceased estate owner’s descendants.

In the same manner a QTIP trustee, who is an independent trustee, could be granted the power to make discretionary distributions of principal to the surviving spouse, who could then also make similar gifts.

Under section 2056(b)(7) of the ILIT rules, however, not even the surviving spouse can be granted a power to appoint the QTIP estate to anyone el (more…)

To begin, a quick overview of estate planning. In general, estate planning is the process of determining the way in which one’s assets will be distributed after death. Because applicable state and federal laws must take a very broad view of the topic and offer “one-size-fits-all” solutions, they frequently do not reflect the wishes of the deceased. However, if no record of the deceased’s wishes can be found, his or her property will be handled in accordance with state intestacy laws, often to the detriment of potential heirs.

In a nutshell - estate planning is important. Experts agree that every man and woman needs a valid plan for the handling of their assets after death. Unfortunately, despite media coverage of the issue, many people still choose to put off estate planning until the last minute - and then are dismayed by the amount of work before them.

For anyone who needs a good reason to start the estate planning process now, consider the purpose of a similar process - financial planning. The goal of a financial planner is to help his client diversify, grow, and protect her assets. By putting a good financial plan into action early on, the client reduces the amount of money she must contribute every month, but will still receive a large nest egg in time for a comfortable retirement.

The same principle applies to estate planning. In fact, the way in which you intend to distribute your assets after death will influence the way in which you choose to handle them while you are alive. The provisions of your will could have profound effects on the types of trust in which you place your funds, for example.

Three reasons to start estate planning early:

- Reduce the burden of time. Designing a good estate plan is a long, time-consuming, ongoing process. Starting early reduces the amount of time you have to com (more…)

To begin, a quick overview of estate planning. In general, estate planning is the process of determining the way in which one’s assets will be distributed after death. Because applicable state and federal laws must take a very broad view of the topic and offer “one-size-fits-all” solutions, they frequently do not reflect the wishes of the deceased. However, if no record of the deceased’s wishes can be found, his or her property will be handled in accordance with state intestacy laws, often to the detriment of potential heirs.

In a nutshell - estate planning is important. Experts agree that every man and woman needs a valid plan for the handling of their assets after death. Unfortunately, despite media coverage of the issue, many people still choose to put off estate planning until the last minute - and then are dismayed by the amount of work before them.

For anyone who needs a good reason to start the estate planning process now, consider the purpose of a similar process - financial planning. The goal of a financial planner is to help his client diversify, grow, and protect her assets. By putting a good financial plan into action early on, the client reduces the amount of money she must contribute every month, but will still receive a large nest egg in time for a comfortable retirement.

The same principle applies to estate planning. In fact, the way in which you intend to distribute your assets after death will influence the way in which you choose to handle them while you are alive. The provisions of your will could have profound effects on the types of trust in which you place your funds, for example.

Three reasons to start estate planning early:

- Reduce the burden of time. Designing a good estate plan is a long, time-consuming, ongoing process. Starting early reduces the amount of time you have to com (more…)