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May 19, 2008
Life Insurance and Irrevocable Trusts
Now that my husband and I have this huge mortgage for the next 24 years, we are looking to get life insurance. I have heard that it is better to set up an irrevocable trust for this purpose - to avoid paying huge estate taxes (we are both US citizens). Does anyone have any info on this, or could recommend a trust lawyer ? thanks
Comments
I believe that it would depend on the beneficiary of the policy, as well as the amount of the estate. You can leave your spouse any amount without being subject to the estate tax, but if there are children, and your estate is of a certain size, there can be a benefit to the trust.
Posted by: guest at May 19, 2008 3:11 PM
Try Ashley Kirkham, Esq. at Snow Becker Krauss - 212-455-0327
Posted by: guest at May 19, 2008 5:02 PM
You will need someone to set up a will if you have not done it already.
Posted by: guest at May 19, 2008 8:07 PM
Life insurance in non-taxable. It has nothing to do with "Estate Tax." If you and your husband own the assets jointly, the death of one will not result in a taxable event.
If the intended beneficiary are your children - The same applies for life insurance not being taxable. As far as assets in your estate, your kids will be screwed. When Obama gets in office, tell your kids to hold onto their hats for the ass-reaming estate tax the government will steal from them.
A CPA
Posted by: guest at May 19, 2008 9:45 PM
As a lawyer who specializes in estate planning, I can tell you that you have gotten a lot of bad advice here. You should consult with a lawyer to give you the correct tax advice and to set up the insurance trust, if you decide to go this route. This planning is straightforward and should not be expensive to discuss or set up. The Bar Association of NYC has a good referral service at 212-626-7373, if you need help finding a reasonably priced lawyer. Good luck!
Posted by: guest at May 19, 2008 11:28 PM
The law firm of Strook and Strook is excellent for setting up a trust fund. They are experenced in all aspects.
Sandy Sleshinger is knowedgeable at that firm.
Their office is in manhattan.
.Be careful with legal advice on this website because most of it is bullshit.
You need a reputable attorney who specializes in wills and trusts.
It is such a complicated subject with so many different trusts.(estate law).
If you want to get your feet wet so you can learn a little bit before you make a commitment try Nolo press books.
It is a a self help publishing company owned by lawyers.
The website is www.nolo.com
YOU NEED A REAL LAWYER..
Posted by: Ysabelle at May 19, 2008 11:53 PM
Itrrevocable trust means you can not reverse it.
What is done is done.
Posted by: Ysabelle at May 19, 2008 11:55 PM
The purpose of a life insurance policy is to have enough money in it to cover the money owned on the house, childrens education maybe future children as well and any other potential money owed. (debts,
funeral,etc.).
Posted by: Ysabelle at May 20, 2008 12:01 AM
Be careful which type of policy you get.
There is whole life insurance, their is term life insurance.
The products vary wildly.
Posted by: Ysabelle at May 20, 2008 12:04 AM
Trust Fund
One has authority.
One has responsibility.
Posted by: Ysabelle at May 20, 2008 12:08 AM
Never make a bank the trustee.
Posted by: Ysabelle at May 20, 2008 12:11 AM
It will not be taxable if the beneficiary is also an owner. When buying insurance on you and your spouse, buy it so that one owns (and pays premiums!) on a policy that's issued on the other's life and vice versa. Then the proceeds are not the part of the insured life's estate.
If you are concerned about your child(ren), give them the money as a gift and let them buy and pay the premiums for the insurance on yours, your spouse's or your joint life. Then the policy is owned by the kid(s) -> not part of your estate.
Posted by: guest at May 20, 2008 4:29 PM
I just finished helping my mother set up an ILIT (irrevocable life insurance trust). Bear in mind that for you to pay estate taxes, your assets have to be quite high to begin with. The threshold is changing every year, but I believe it's currently over 3 million. Granted, with NYC real estate, maybe a lot of people approach that threshold. Bear in mind too that ILITs can be complex (my mom's was, due to a variety of trusts that had to "pour" into others). Speaking to a knowledgable lawyer is essential, and probably interviewing several.
Posted by: guest at May 23, 2008 11:29 PM
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