Insurance TrustPurpose of Insurance Trusts

The financial costs of supporting any sized family can be difficult to balance at times. While estate planning decisions may clear-cut for one individual, smart planning for the family requires a responsive understanding of how complex trusts, including insurance trusts, and related assets interact with each other. The irrevocable life insurance trust can actually be one of the most intricate estate planning devices to construct for the family. That makes it crucial to examine any insurance trust within the context of how the trusts can legally and economically affect other loved loves. Life insurance trusts are fortunately one of the most effective cost-cutting tools in estate planning for the family, if properly formatted. Our Charleston Estate Planning attorneys are well experienced with successfully managing the policy challenges and legal difficulties of life insurance trusts in Illinois.

Insurance Trust Basics

Life insurances trusts, or irrevocable life insurance trusts, are designed to help individuals and families lower or even eliminate the estate taxes tied to a loved one’s life insurance. Like other irrevocable trusts, life insurance trusts are an estate planning device that transfers individual ownership. One can sacrifice individual ownership to life insurance policies, thereby forfeiting the direct costs and risks associated with ownership. Life insurance trusts can also produce reduced estate taxes by transferring the financial security of insurance coverage to a loved one. An insurance trust also ensures financial flexibility for heirs through insurance coverage that does not contribute to estate taxes.

Because a life insurance trust is irrevocable, this means that once the insurance trust is created, it cannot be reversed. This means that the health coverage and benefits of  a life insurance trust are quite stable by offering some peace of mind for the well-being of your loved ones. At the same time, a life insurance trust will resign ownership so that the terms and agreements of coverage may not be tweaked or adjusted at a later date.  A properly drafted life insurance trust can establish an incredibly lucrative transfer of tax savings and insurance coverage for loved ones.

Our Charleston estate planning attorneys can structure an individualized life insurance trust that provides measurable estate tax savings, flexibility to beneficiaries, and a reliable healthcare support for your loved ones

Insurance Trust Management

While life insurance trusts can have many estate tax benefits, insurance trusts may create more problems than they solve if they are poorly designed. In order to receive many of the tax benefits of insurance trusts, some specific and quite intricate guidelines must be followed. Our Charleston Estate Planning Attorneys provide the necessary legal counsel for individuals, professionals and families who wish to create life insurance trusts that will maximize estate tax savings.