I’m buying life insurance, do I really need a trust, and if so what kind?

A client is buying life insurance, do they really need to set up an irrevocable life insurance trust (“ILIT”) to own that insurance? With high estate tax exemptions is that really relevant? This webinar will explain the pros and cons of having a trust own life insurance and why trust ownership of life insurance is often advantageous. Trust ownership may not be a traditional ILIT.

Consider that the estate tax exemption declines in 2026 by half. Clients may live in or move to a state with an estate or inheritance tax. For some clients, an irrevocable trust might be useful to mitigate future estate taxes. Even for clients with no foreseeable estate tax worries and for those with young families, a trust may be prudent to protect the death proceeds for the benefit of intended beneficiaries.

Asset protection remains a critical reason to protect insurance proceeds with trusts. What type of trust should be used? Perhaps practitioners should rethink traditional ILITs which require outright distributions to heirs at ages as young as 25 or 30 and no GST allocation. A more robust modern ILIT may be preferable. For smaller estates, might clients consider having the policy payable to a trust formed on death under a will or revocable trust?  Term policies with no cash value may not need the extra asset protection prior to death afforded by an irrevocable trust and policies including long-term care benefits should not typically be held in an irrevocable trust.  For some, SLATs or other irrevocable trusts funded with significant assets may be a better option to a minimally funded ILIT.  Should the trust be funded with one large gift or annual exclusion gifts using Crummey powers?

Speakers: Martin Shenkman, Esq. and Joy Matak, JD, LLM of Sax, LLP

Featured Charity: American Cancer Society.

Email us your questions or ideas in advance and we’ll include them in our discussion

*This may constitute attorney advertising.

* No CPE, CLE, etc. is offered but a certificate of attendance will be provided.

Thursday July 20, 2023 4:00-5:00pm EST



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