How To Protect Life Insurance Proceeds From Taxation

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So why is this a good idea? The proceeds from the life insurance are not part of your estate if the ILIT owns the life insurance. Therefore, they are not subject to estate tax upon your death.

If you have not yet purchased life insurance, you should create your ILIT first. Have your ILIT purchase the life insurance. This will circumvent the transfer of life insurance from you to another party, thus avoiding any difficulties if you do unexpectedly pass away since the proceeds of your life insurance policy would revert to your estate if you died within three years of the transfer. The ILIT is a phenomenal tool for protecting your life insurance from taxation, leaving behind more for your loved ones.

To put the proper legal and financial protections in place for your family, contact our office to schedule a time for us to sit down and talk. We normally charge $750 for a Family Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.