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Using A Life Insurance Trust To Save On Taxation And Expense

A life insurance trust allows you to put the proceeds from an insurance policy back into the trust fund. Such a trust provides you more control over the proceeds of an insurance policy. For example, it allows for proceeds to be put aside for safekeeping for a minor child until they become an adult. Under the right circumstances, such a trust can also help reduce estate taxes.

However, as there are legal requirements that accompany a life insurance trust, it may be necessary to speak to an experienced estate planning lawyer to determine whether such a trust is right for you. For over 60 years, Polizzotto & Polizzotto, LLC, has provided legal services and representation to New York and New Jersey. We represent individuals, entrepreneurs and businesses throughout the region. We can put together a financial strategy that meets your needs and goals.

The Benefits Of A Life Insurance Trust

When prepared correctly, a life insurance trust can provide several advantages. These include:

  • The proceeds may avoid probate and thus avoid income and estate taxation.
  • Such a trust provides greater control over the insurance policy and the way proceeds are distributed and spent.
  • Proceeds may be able to pay some or all of the estate taxes.

Mistakes In Drafting A Life Insurance Trust Can Be Costly

Life insurance trusts are complex. Such trusts are irrevocable and must already be in existence for a particular period before your death. Also, there are several tax requirements and ramifications that accompany such a trust. Mistakes in drafting such a trust can put the assets inside of the trust at risk. Also, such a trust may not be the right solution for everyone.

Our attorneys will assist you in any way we can. When drafting a trust, we will carefully put together the correct provisions to meet your unique circumstances. Any trust we draft will comply with applicable laws.

An Experienced Elder Law Attorney On Your Side

Our estate planning attorneys will guide you toward making the right choices. We will make ourselves available to answer all of your questions. To contact our law firm to learn more, please call our office at 718-213-4861 or send us an email.