Can I Put Life Insurance in a Trust?

Even though the federal estate tax was repealed in 2010, a $5 million exemption came back retroactively which is also effective for 2011 and 2012. In 2013, the exemption will decrease to only $1 million. For those people who are liable for estate tax either by the state and/or the federal government, there are a several options available that could help reduce those estate taxes.

One good way to reduce the amount of estate taxes could be through the use of a Irrevocable Life Insurance Trust, which would hold and own all life insurance benefits. This could remove the value of the insurance payout from the taxable estate while providing immediate cash to pay creditors, funeral expenses, and other costs associated with losing a loved one.

If you live in the Los Angeles area and are interested in finding ways to lower your estate tax burden, consult with a professional Estate Planning Attorney to see if a Irrevocable Life Insurance Trust is an option that is right for you.

*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.