Irrevocable Life Insurance Trusts
An Irrevocable Life Insurance Trust is established while you are living and may not be changed by you or anyone else. The trust has the ability to transfer assets out of your taxable estate and into the trust, thereby reducing the assets subject to estate taxes. Assets held by the trust will be professionally distributed according to your wishes upon your death and will avoid estate taxes as well as the probate process.
The proceeds of the insurance policy are not included in your estate, and therefore not subject to estate and income taxes. Proceeds of the policy may be excluded from your spouse's estate as well. The trustee can use the proceeds to provide liquidity for your estate, make special payments to your spouse or provide a lifetime stream of income to your spouse.
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