Life insurance trusts: how to avoid estate and GST taxes
Article Abstract:
Life insurance trusts are excellent estate planning tools that can guarantee a beneficiaries access to insurance proceeds while avoiding estate and generation skipping-transfer taxes in many cases. Specifically, the use of cascading Crummey powers, which split power between children at different times in order to maximize gift tax exclusions, is a good option. Under such a scheme, children who are beneficiaries can take advantage of the exclusion, and then make similarly excludable gifts to their own children, taking much of the trust's value out of the realm of the estate or gift taxes over time.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1995
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Impact of generation-skipping tax on life insurance trusts
Article Abstract:
Life insurance trusts have become important estate planning tools since the advent of the generation-skipping tax, or GST. The GST's million-dollar exemption makes life insurance an attractive way to pass on wealth while minimizing taxes. However, careful planning is required to avoid tax consequences due to lapsing Crummey powers, to properly allocate and leverage the exemption, and to use contingent powers of appointment.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1997
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Creating a life insurance private pension via split-dollar
Article Abstract:
Favorable estate tax treatment and current liquidity are two benefits of using split-dollar life insurance for life insurance private pension plans. Irrevocable life insurance trusts can be structured with the indirect continued right to access the cash value through taxpayers' spouses' direct power. This provides lifetime liquidity and exclusion of death benefit proceeds from taxpayers' estates.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1998
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