An option for inexpensively paying estate taxes is to purchase life insurance through the use of an Irrevocable Life Insurance Trust. When a life insurance policy is placed in trust, it is no longer counted toward the value of your estate for estate tax purposes and death benefits are not included in your Estate. Life Insurance Trusts help you to reduce or eliminate estate taxes so more of your estate can go to your beneficiaries and also give you more control over your Insurance policies.
Irrevocable Life Insurance Trust Denver
After the Irrevocable Life Insurance Trust is created, the Insurance policies must be paid. The usual way the Trust operates is as follows: First, you as Grantor gift cash to the Trust. Then, the Trustee notifies the beneficiaries. After that, the beneficiaries acknowledge the gift but do not remove the funds from the Trust. The Trustee uses the gift to pay the premiums. Lastly, after you die the proceeds are paid into the Trust and are available to pay estate taxes. The Trustee then distributes proceeds to your beneficiaries as you instructed.