V—Life Insurance Trust

The trust is one of the most basic tools of estate planning. When made irrevocable and funded with life insurance, it accomplishes multiple objectives. For example, it can:

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• Provide Creditor Protection
• Provide Income for a Family
• Provide Liquidity for Estate Settlement Costs
• Reduce Estate Taxes
• Avoid Probate Costs
• Provide for Management of Assets
• Maintain Confidentiality
• Take Advantage of Gift Tax Laws

DURING LIFETIME, it is possible for a grantor to establish a trust that will accomplish all of these objectives. The beneficiaries of such a trust are normally members of the grantor’s family and likely to be estate beneficiaries.

Once the trust is created, policies on the life of the grantor can be given to the trust. If no such policies are available, then the trustee would obtain the needed life insurance. In either case, funds are given to the trust, which, in turn, pays the premiums to the insurance company.