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Life Insurance Trusts

The Irrevocable Life Insurance Trust (“ILIT”) can be a great tool to decrease estate taxes. For those families and individuals who have wealth exceeding the $5.43 million lifetime exemption amount, an ILIT can be established to transfer wealth outside the taxable estate. An ILIT works by transferring fund to a trust sufficient to pay the premiums on a life insurance policy. When the insured dies the death benefits are paid to the trust rather than the deceased’s estate and are therefore not included and subject to estate tax.

ILITs are often used in conjunction with “Crummy” powers to allow the transfer of life insurance premiums to the trust to avoid gift taxes due to the annual exclusion amount. The annual exclusion amount lets individuals transfer amount of $14,000 to any individual during a taxable year.  Elliot understand these rules and designs estate plans to optimize tax savings.

In addition to the primary purpose of saving estate taxes, ILITs can be a great tool to set aside money for children and grandchildren who may not be ready to receive a substantial life insurance payout.

Elliot is aware of the pitfalls that exist when buying and selling businesses and has the knowledge to walk you through the process. Elliot has worked on extremely complex transactions and has the experience necessary to keep you out of trouble while working towards your goals.