Michael Drews and Company

Life Insurance Trusts

Current tax law allows the transferring of up to $5,000,000.00 in estate assets per person over a lifetime. For some people this is not enough. One of the most powerful tools in estate planning is the Irrevocable Life Insurance Trust (ILIT). Properly structured, insurance held inside of an ILIT provides tax-free growth over the owners’ lifetime. And, unlike life insurance held outside of an ILIT, the proceeds are estate tax free.

Life insurance proceeds are free from income taxes when they are paid to one's survivors. However, the death benefits on policies are included in one's taxable estate. This is often overlooked when people estimate the size of their estate, since life insurance is not always counted as an asset at face value.


The idea of an irrevocable life insurance trust is to remove the policy proceeds from one's taxable estate. An irrevocable life insurance trust avoids estate taxes because it is a separate legal entity in which the individual retains no interest. In
order to obtain this benefit, however, one must forfeit all control and ownership rights to the life insurance policies held in such a trust, which is why the trust is "irrevocable."

Michael Drews is a registered representative with the following registrations [6 & 7] and can transact business with clients in California.  Michael Drews is also an investment adviser agent licensed in California.  If you are not a resident of the state noted above, all investment-related information on this site is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services over the internet.

 

Securities offered through HD Vest Investment ServicesSM, Member SPIC, Advisory Services offered through HD Vest Advisory ServicesSM, 6333 North State Highway 161, 4th Floor, Irving, Texas 75038, 972-870-6000.

 
Michael Drews and Company is not a registered broker/dealer or independent investment advisory firm.
 
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