Smart Life Insurance Trusts That Offer Flexibility in Uncertain
National Underwriter (Life/Health) (05/21/01) Vol. 105, No. 21 p.24; Zipse, Randy

Several life insurance trusts offer flexibility for individuals planning the financial future of their loved ones. A Spousal Support ILIT is a popular alternative because it not only allows people to plan ahead for their families' futures before they die, but it also helps planners to retain maximum flexibility with their finances. By owning life insurance inside a Spousal Support ILIT, a couple can achieve income replacement, estate tax planning, and supplemental retirement income. Another life insurance trust that offers similar flexibility is the Single-Life Spousal ILIT. The Single-Life Spousal ILIT is an irrevocable life insurance trust that allows the trustee to make distributions to the insured's spouse and children during the insured's life. In addition to granting the insured's spouse access to the policy's cash value during the insured's lifetime, the Spousal ILIT keeps the property out of the estate of both spouses. Insurance experts say the trust is an excellent hedge against potential changes in tax law while also providing potential tax-favored access to policy cash value in case of changes in family finances.


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