We like to unravel the alphabet soup of estate planning acronyms on our blog from time to time. Today we will look at the legal device called the ILIT. In an estate planning context, an ILIT is an irrevocable life insurance trust.Federal Estate TaxBefore we explain the value of an ILIT, you must understand some things about the federal estate tax.There is a federal estate tax credit or exclusion. If the value of your estate exceeds the amount of this credit, the estate tax is potentially … [Read more...] about Irrevocable Life Insurance Trust in San Jose: What Is an ILIT?
The acronyms that are used in the field of estate planning can sometimes leave the layperson scratching his or her head. Because of this, we often examine commonly used acronyms to take the mystery out of them. In this installment, we will highlight the irrevocable life insurance trust or ILIT.The estate tax on the federal level carries a 40% maximum rate, and the 2014 exclusion amount is $5.34 million. If you inventory your assets and find that your net worth exceeds this figure, you would do … [Read more...] about Demystifying the ILIT
As you take inventory of your assets, you are probably thinking that you want to see the total of your assets before you divide it among your heirs. This make sense, but you have to evaluate that total very closely in light of the potential ravages of the Federal estate tax.If your resources exceed the amount of the exclusion that is in place at the time of your death, the tax will be imposed unless you have taken steps to gain estate tax efficiency.When you are conducting this inventory, … [Read more...] about When Tallying Assets, Include Life Insurance Proceeds
You have to be very concerned about the looming specter of the estate tax when you are positioning assets with the future well-being of your loved ones in mind. Contrary to popular belief, the estate tax is not just reserved for the very wealthy, and more people will be exposed to the tax in 2013.At the end of this year, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 is going to expire. When it does, under currently existing laws the estate tax exclusion … [Read more...] about Life Insurance Trust Can Deliver Tax Savings
You see a veritable alphabet soup of acronyms referenced when you delve into the topic of estate planning. We like to take a look at some of these acronyms from time to time in an effort to demystify the terminology. With this in mind, we would like to highlight the ILIT or Irrevocable Life Insurance Trust.The federal estate tax looms large when you are planning your estate. At the current time it is carrying a 35% rate, and this rate is scheduled to rise to 55% at the end of the year. … [Read more...] about The Value Of An ILIT
Facts:Partner A and Partner B are partners in an LLC treated for income tax purposes as a partnership and co-shareholders in other entities.Partner A and Partner B have entered into a buy-sell arrangement which among other things provides that in the event of the death of one of them, the other will purchase the deceased shareholder’s interests. The obligations to purchase have been partially funded with life insurance. Thus Partner B is the owner of a life insurance policy on Partner A’s … [Read more...] about Cross Purchase ILIT Example