I recently wrote about the importance of reviewing your estate plan and life insurance values every 3 years. Well, also look at who is in control of the ILIT, Irrevocable Life Insurance Trust, that you setup many years ago. I have a friend who wanted to review the values of his life insurance policies that are owned by an ILIT and then realized the insurance company wasn’t notified of the death of the trustee of the ILIT nor were they notified who was appointed as the new trustee. He then found out the new trustee wasn’t paying attention to mail from the insurance company and most likely threw away annual statements. Kind of awkward conversations to have.
ILIT’s are great planning tools. Not as much now since estate tax laws have changed and the amount of money that can pass from one generation to the next has increased. But as they say, what goes up must come down, as in the stock market. I think the reverse is the same for taxes. What has come down must go up. So don’t dismiss the use of ILIT’s from your estate plan. Talk with your attorney about your unique situation and plan accordingly. As with any trust, they are great ways to control your assets from the grave.
I just want to stress the need to review everything on a regular basis. This is something a good advisor does with you. I want YOU to have as much control and flexibility as possible with any of your financial matters. Also, stay in Touch with the trustees, especially if a new one steps in after a death.
Article By: Mark A. Buhrke, ChFC®, CLU® , Vice President, Private CFO™
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