Florida Irrevocable Life Insurance Trust Lawyer

A Florida Irrevocable life insurance trust (ILIT) is a trust where life insurance is owned by the trust.

There is a common misconception that life insurance proceeds are not subject to Federal Estate Taxes.  While the proceeds are received by the beneficiaries free of any income taxes, the proceeds are countable as part of your taxable estate and therefore your family can lose about half of its value to estate taxes. 

An Irrevocable Life Insurance Trust (ILIT) is created specifically for the purpose of owning your life insurance policy. A properly established and administered trust holds the the life insurance policy outside of your estate and keeps the proceeds from being taxable to your estate. The proceeds from the insurance policy can then be used to provide your estate with the liquidity to pay estate taxes, pay off debts, pay final expenses and provide income to a surviving spouse or children.

The ILIT will be the policy owner and beneficiary.  Once your trust is established, you use your annual gift tax exclusion to make cash gifts to your trust. Your beneficiaries forgo the present gift (in lieu of the future proceeds) and the trustee uses the remaining gift to pay the premium on the life insurance policy.

There are many options available when setting up an ILIT.  For example, ILITs can be structured to provide income to a surviving spouse with the remainder going to your children from a previous marriage.  You can also provide for distribution of a limited amount of the insurance proceeds over a period of time to a financially irresponsible child.

Our firm is dedicated to helping clients make educated, informed decisions about their assets and will work with you and your team of financial advisors and CPAs to implement a highly sophisticated estate plan.

If you would like more information on Florida Life Insurance Trusts or to create a Life Insurance Trust in Jacksonville or other areas of Florida, CONTACT our Florida Irrevocable Life Trust (ILIT) Lawyers by email or call us at 904-685-1200 to discuss your situation today.