Many individuals in Oregon worry about whether their loved ones will end up with the burden of having to pay their estate taxes after they die. Fortunately, there may be a way to reduce them with an irrevocable life insurance trust (ILIT). Here’s what you need to know about this estate planning tool.
Who benefits from these trusts?
It’s not uncommon for individuals who have large insurance policies to create an ILIT. This can save their heirs quite a bit of money in the end. It does cost money to maintain them over time, so individuals need to think about whether it is worth the cost to have one created on their behalf. It’s also not that uncommon for some individuals to have an ILIT in place even if they don’t have a life insurance policy with a large payout. This is because they don’t want their family members to have to worry about paying taxes on it in the future even though they won’t be receiving a large payout.
The downsides of these types of trusts
When many individuals are planning their estates, they choose to set up an ILIT despite the fact that there are downsides to doing so. They can’t revoke or amend the owner of the policy at any time. This is a common reason why many individuals don’t take advantage of these types of trusts.
For people who want to set up an irrevocable life insurance trust, they may want to contact an attorney that has a vast amount of experience with estate planning. A lawyer can draft the right type of document for his or her clients and their particular needs.