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Serving a Great Need With A Life Insurance TrustSince your gift is being made payable to the Trustee of your ILIT, the beneficiaries must receive prompt notice of their right of withdrawal of the gift and a reasonable time to exercise it (usually 30 days). After designing the plan with your advisors, gifts (that represent the funds utilized for payment of insurance premiums) should be made directly into a trust account via the trustee. The trustee will then provide a "Crummey notice" of the beneficiaries' right to the gift. The trust must be the applicant/owner of the life insurance policy; there is a process that occurs between the insured, the trustee, and the insurance company in order to complete underwriting and obtain the insurance coverage. A gifting schedule should be clearly established due to the complexities of the gift tax laws. The filing of a gift tax return may need to be coordinated with your attorney and accountant. An annual meeting should be scheduled with your estate planner to review your policy and verify current and future funding requirements. Of course, the trustee should maintain copies of all records to confirm the plan, in the event auditors come calling at the time of your death. In conclusion, an ILIT provides a great strategy for a client who needs liquidity at death, or wants to benefit his/her family with tax free wealth for future generations. | ||||
Dear Friends, Collegues Sincerely, |
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© 2004 Tarta Law - Steven Wayne Tarta. All Rights Reserved |
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