An Irrevocable Live Insurance Trust (hereinafter called an "ILIT") is a type of trust that may not be altered, changed, or amended. In many people's estate, life insurance is the bulk of assets and therefore, the best option is to create an ILIT to shelter the life insurance proceeds from being counted in one's estate value. Thus, the purpose of an ILIT is estate tax avoidance. In 2009, the estate tax had a forty-five (45) percent highest tax rate. In 2010, the estate tax rate is zero because there is currently no estate tax. However, in 2011, the estate tax if unchanged will kick back to $1 million as the estate tax exemption with the highest tax rate at fifty-five (55) percent. There is an additional benefit to an ILIT. For asset protection purposes, the life insurance and cash value is untouchable by creditors unless it is considered a fraudulent transfer.
A fraudulent transfer is a transfer designed to deter, defraud, or delay the payment of a judgment owed to creditors. The best time to set up an ILIT is prior to any claims being imagined or filed against you.
Robertson Law Group, LLC
630-364-2318 or 312-498-6080
RobertsonLawGroup@gmail.com
Key words: Life insurance, estate planning, wills, living trusts, revocable living trusts, naperville, lisle, plainfield, bolingbrook, cash value life insurance, asset protection.
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