Benefit of a Life Insurance Trust after the Repeal of NJ Estate Tax
As we get closer to the repeal of the New Jersey Estate Tax on January 1, 2018, it is important to remember that New Jersey has NOT gotten rid of its inheritance tax. Accordingly, if you wish to leave money to brothers, sisters, nieces, nephews, friends or a significant other (besides a spouse) and if […]
Nice Article on the Basics of ILITs
A colleague of mine, David Saltzman, has written a nice article on the Basics of Irrevocable Life Insurance Trusts. As he points out, setting up a life insurance trust is a great way to minimize your estate tax liability and it can be especially important in New Jersey. Dave is a great resource and knows […]
Is there an Inheritance Tax on Life Insurance Proceeds?
One of the biggest misconceptions people have about life insurance is how it should be taxed. Most people think that they can receive the proceeds completely tax free. Upon the death of the insured, the beneficiary of a policy can almost always receive the proceeds without paying an income tax. However, estate taxes and inheritance […]
Life Insurance for College Students
I was speaking with a colleague of mine the other day and the subject of college loans came up. It occurred to us that with the new stricter lending regime, it is probably more important than ever for a parent to consider getting life insurance on a child of theirs if they are co-signing a […]
Protecting your Life Insurance Trust from taxes
The Importance of Proper Trust Maintenance The trustee of an irrevocable life insurance trust (ILIT) must follow numerous rules and regulations laid out by the IRS in order to exclude the ILIT’s policy proceeds from federal and state estate tax. The insured and the trustee should check to see that these rules and regulations are […]
Benefits of a Second to Die Life Insurance Trust
I. General Benefits Tax savings Control of assets after death Second to die policies typically provide guaranteed money for your heirs which is cheaper to obtain than single life premium policies. II. Reasons to establish a Second to Die Life Insurance Trust Pay taxes upon death for assets outside of trust Provide guaranteed funding for […]
Contribution Notice – Who Signs for a Minor?
Irrevocable Life Insurance Trusts (ILIT) Many people create irrevocable life insurance trusts (ILIT) for the benefit of minor children. The common scenario is that the grantor will create an ILIT and his or her spouse will act as trustee of such trust. Because ILITs are established as Crummey trusts, a contribution notice should be sent […]