Estate planning is a crucial step for a person to take. The estate planning process can include the creation of what is known as an irrevocable life insurance trust. There are a variety of benefits that can be realized through establishing an irrevocable life insurance trust.
Creating an Irrevocable Life Insurance Trust
The creation of an irrevocable life insurance trust is akin to the establishment of any other type of irrevocable trust. An irrevocable life insurance trust is established via a trust agreement, typically drafted by a skilled and experienced attorney.
Once the trust instrument is created, the trust itself must then be funded. With this type of irrevocable trust, a life insurance policy (sometimes policies) is placed as an asset in the trust. Once it is made a part of the trust, it cannot be removed and the trust itself cannot be changed or altered.
When the individual who created the trust passes away, the proceeds from the life insurance policy are paid to the trust itself. The trustee then has the authority to pay the proceeds to the beneficiaries of the irrevocable life insurance trust in the manner described in the trust instrument.
Benefits of an Irrevocable Life Insurance Trust
There are a number of benefits associated with an irrevocable life insurance trust. Firstly, this type of arrangement serves as a mechanism for avoiding certain estate taxes. Secondly, it protects assets in the trust from seizure by creditors of beneficiaries of the trust. Finally, it can regulate the manner in which any beneficiaries to the trust receive money.
Hire an Experienced Estate Planning Lawyer in Cedar Park, Texas
If you are looking for an experienced estate planning lawyer in Cedar Park Texas, to explore the benefits of an irrevocable life insurance trust, contact the Jackson Law Firm today. You can schedule your initial consultation at the firm with absolutely no cost!
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