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Irrevocable Life Insurance Trust
Old 10-23-2006, 10:49 AM   #1
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Irrevocable Life Insurance Trust

Okay, I should have done this before 3 tours in Iraq but……

I have $1,100,000 in Term Life currently
DW and Kiddies are the beneficiaries
I am the owner
Military JAG can do an ILIT for free for me.

I would also like to dictate some of the investments for the proceeds to make it easier on DW.

Any reasons why I should not get an ILIT?

Lance
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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 01:17 PM   #2
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Re: Irrevocable Life Insurance Trust

NO! Do it, the fact that they are paying for it is even better.

Do make sure that you actually set up a separate bank account for the trust and only pay the premiums out of that account.

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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 04:49 PM   #3
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Re: Irrevocable Life Insurance Trust

Quote:
Any reasons why I should not get an ILIT?
How would you benefit from such a trust? Would you have to change the benefiary to the trust? How would the distribution of the proceeds be better than a regular old beneficiary nomination of the LI policy?
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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 06:22 PM   #4
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Re: Irrevocable Life Insurance Trust

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Originally Posted by mickeyd
How would you benefit from such a trust? Would you have to change the benefiary to the trust? How would the distribution of the proceeds be better than a regular old beneficiary nomination of the LI policy?
On an ILIT the trust becomes the owner and bene on the policy.

You benefit by

1. Keeping the insurance out of your estate for federal estate tax purposes

2. The trust will allow you to control the disposition of the assets after you die. This can be pretty helpful in keeping children from getting huge chunks of $$$ before they are ready

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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 07:05 PM   #5
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Re: Irrevocable Life Insurance Trust

How does the "irrevocable" provision affect it?
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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 07:47 PM   #6
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Re: Irrevocable Life Insurance Trust

Patrick, the money you "gift" into the trust is the irrevocable part of it. If the policy accumulates cash value (In this case it will not) that would also belong to the trust.

As long as you are alive you can change the beneficiary of the trust.

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Re: Irrevocable Life Insurance Trust
Old 10-23-2006, 11:55 PM   #7
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Re: Irrevocable Life Insurance Trust

saluki9 is exactly right. Current estate taxes can be up to 46%
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Re: Irrevocable Life Insurance Trust
Old 10-24-2006, 07:34 PM   #8
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Re: Irrevocable Life Insurance Trust

Can't see a reason not to...............keep in mind "Irrevocable" means if you get divorced and want to change benies, might be a tough road.......
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Re: Irrevocable Life Insurance Trust
Old 10-25-2006, 04:54 AM   #9
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Re: Irrevocable Life Insurance Trust

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Can't see a reason not to...............keep in mind "Irrevocable" means if you get divorced and want to change benies, might be a tough road.......
Not really.

It would only matter if she tried to divorce you after you died

As long as you are alive you can just cancel the policy, stop paying the premiums, or amend the trust.

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Re: Irrevocable Life Insurance Trust
Old 10-25-2006, 08:45 AM   #10
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Re: Irrevocable Life Insurance Trust

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Originally Posted by saluki9
Not really.

It would only matter if she tried to divorce you after you died

As long as you are alive you can just cancel the policy, stop paying the premiums, or amend the trust.
I was being facetious..........
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