Estate Planning and Life Insurance

Crafting ILITs for Tax Benefits, Navigating the Transfer for Value Rule and Addressing Beneficiary Designations

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, January 17, 2012

Recorded event now available

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Program Materials

This CLE webinar will prepare estate planning counsel to overcome challenges in drafting effective irrevocable life insurance trusts, offer approaches to navigate the application of the transfer for value rule and exceptions, and review the importance of addressing beneficiary designation issues.

Description

Irrevocable life insurance trusts (ILITs) must be carefully structured and administered to protect life insurance assets from taxation. Drafting effective ILITs is critical to achieve the desired tax benefits and allow flexibility to address challenges related to trustees, modification and termination.

Errors in drafting ILITs are not always apparent at the time documents are created. Even if the ILIT is mistake-free, changes in circumstances may call for the ILIT to be modified. Because ILITs are irrevocable, it is important to allow for modification.

The application of the transfer for value rule and its exceptions can be complex. Transfers of life insurance policies and interests in those policies must be scrutinized for possible violations of the transfer of value rule. Reviewing beneficiary designations is important to avoid future issues.

Listen as our panel of estate planning attorneys provides guidance on the challenges in drafting irrevocable life insurance trusts, discusses pitfalls to avoid in the application of transfer of value rules and its exceptions, and points out the importance of reviewing beneficiary designations.

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Outline

  1. Overcoming challenges in drafting ILITs
    1. Pitfalls and planning for them
    2. How to fix them
  2. Tax issues
    1. Gift taxes
    2. Transfer for value
    3. Retained interest rules
    4. Estate and GST taxes
  3. Trustee duties and liabilities
  4. Crummey withdrawal power
    1. Drafting to serve goals of settler and trustee
    2. Designating Crummey power holders
    3. Notice
  5. Strategies for drafting ILITs
    1. Flexibility (planning for changes in circumstances)
    2. Terminations
    3. Modifications
    4. Drafting Crummey powers
  6. Transfer for value rule and exceptions
  7. Beneficiary designations

Benefits

The panel will review these and other key questions:

  • What are the key provisions in irrevocable life insurance trusts?
  • What are the pitfalls when using an ILIT? What steps can be taken to overcome those pitfalls?
  • What pitfalls should be avoided in the application of transfer of value rules and its exceptions?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Diana S.C. Zeydel
Diana S.C. Zeydel

Shareholder
Greenberg Traurig

She focuses her practice on estate planning for high net worth individuals and families. She assists clients in...  |  Read More

James A. Soressi
James A. Soressi

Law Office of James A. Soressi

His expertise is as a tax attorney in the practice of estate planning, business planning and estate administration. His...  |  Read More

Scott K. Tippett
Scott K. Tippett

Director
Carruthers & Roth

He focuses on wealth law and provides an integrated approach to estate planning and administration, asset protection...  |  Read More

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