 |
|
The Single/Married Person ILIT is a Sole-Grantor Irrevocable Life Insurance Trust (ILIT) than can be created by either a single person or a married person.
|
| |
|
|
|
Its primary purpose is to take title to and hold a life insurance policy(s) on (behalf of) the life of the grantor/insured so proceeds of the policy will not be in the grantor’s estate for transfer tax purposes upon the grantor’s death.
|
|
Whenever an owner (one who possesses incidents of ownership) of a life insurance policy dies, the proceeds of the policy become part of his taxable estate.
|
|
|
When a tax leveraged plan, such as a Charitable Remainder Trust, is established by the grantor, it usually means that the grantor has made a sizable deferred gift to charity. Often a means of “replacing” the value of that gift is accomplished with a life insurance policy.
|
|
Once the ILIT is set up, the grantor then transfers a certain amount of cash (or other liquid assets) to the trustee of the ILIT under the Crummey Letter Rules.
|
|
The grantor holds no powers of appointment over the trust to cause the principal of the trust to be in his estate for tax purposes.
|
|
Transfers to the ILIT can qualify for the annual gift tax exclusion for the grantor of $11,000 per grantee/beneficiary (adjusted for inflation in increments of $1,000) when “Crummey Letters” are properly implemented during the transfers to the trust.
|
|
|
|
|