Managing an Irrevocable Life Insurance Trust

It is important to understand the risks and obligations associated with establishing an irrevocable life insurance trust (ILIT) as a creative instrument for your estate planning needs. Below is a list of ways we help clients and advisors avoid challenges faced by fiduciaries, particularly if they are remotely involved.

• Comprehensive knowledge of life insurance policies and how they work.

• Regularly review the policy to assess for risk exposure and performance.

• Identify and assess emerging policies that may be more appropriate.

• Manage the documentation and scheduled administrative tasks necessary in the even of an IRS audit.

• If the trust is funded using the annual gift tax exclusion, the trustee must send timely notices to the beneficiaries of their withdrawal rights.

• Manage day-to-day trust administration including premium notification, collecting payments and Crummey letters to beneficiaries.