Nice Article on the Basics of ILITs

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?

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 […]

Understanding What “Per Stirpes” Means

Understanding What Per Stirpes Means

Sometimes it’s easier not to reinvent the wheel. Back in 2006, Debra M. Simon, CPA wrote an excellent article about Understanding the Pitfalls of Beneficiary Designation Forms. Included in that article is a clear explanation what it means to name your issue, “per stirpes” compared to naming your issue, “per stirpes by representation” as beneficiaries […]

Special Needs Planning in NJ – Part 3 of 4

Estate Planning for A Special Needs Child

Estate Planning for A Special Needs Child In Part III of this Series, I want to discuss estate planning issues for parents of a special needs child. A typical estate plan for parents without a special needs child includes: Will; Financial Power Of Attorney; Health Care Power of Attorney; Advanced Health Care Directive; and Naming […]

Helpful Estate Planning Hints for Divorce Attorneys

Helpful Estate Planning Hints for Divorce Attorneys

A. Have your client do pre-divorce estate planning(especially if the split is partially the result of financial matters) 1, Most clients are not aware that if they die during the pendency of their divorce that their soon to be ex may still inherit everything. This can be particularly important if it is likely that the […]

Protecting your Life Insurance Trust from taxes

Proper Trust Maintenance

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

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

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 […]