Episode Details

New clients came in with two life insurance trusts—professionally drafted, signed, notarized, and organized in beautiful binders. There was just one problem: the trusts didn’t do anything.

In this episode, Jill breaks down what an irrevocable life insurance trust (ILIT) is, when it actually makes sense, and how it fails when no one follows through. This is a real-life look at the gap between having documents and having an estate plan that actually works.

What You’ll Learn in This Episode

What an irrevocable life insurance trust (ILIT) actually does 

Why ILITs are primarily used to address estate tax 

The current federal estate tax exemption and why most people don’t need an ILIT 

The difference between estate tax and estate income tax (Form 706 vs. Form 1041) 

Why “setting up” a trust is not the same as “funding and administering” it 

The key questions to ask about any life insurance policy: Who owns it? Who is the beneficiary? 

Why an ILIT that isn’t connected to the policy is just a stack of paper 

What’s actually involved in creating and maintaining an ILIT

How gift tax rules apply when funding a life insurance trust

What Crummey letters are and why they matter 

Why serving as trustee is a real job, not just a title 

How the “trust recession” is changing the way people approach estate planning

Resources & Links

Watch this episode on YouTube: https://youtu.be/JaE0tkaacoU

Episode 5, Why you shouldn’t worry about the estate tax: https://www.deathreadiness.com/podcast/why-you-shouldnt-worry-about-the-estate-tax

Get your copy of The Death Readiness Playbook: www.deathreadiness.com/playbook

Connect with Jill:

• Website: DeathReadiness.com
• Email: jill@deathreadiness.com
• Learn more about Jill’s solutions
• Subscribe to the Death Readiness Dispatch!
• Ask a question for Tuesday Triage

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This podcast provides estate planning guidance for women and discusses real, practical issues, from caregiving, pre-planning a funeral, how to avoid probate using beneficiary designations, planning for individuals with special needs (and special needs trusts), whether you need a professional fiduciary (trustee or executor), how the estate tax works and how to preserve your legacy.

Tuesday Triage episodes answer questions from listeners like you, from powers of attorney, healthcare advance directives (and whether they work when you’re pregnant), what a Last Will and Testament really is, whether you need a trust, how Medicaid works and how to have senior and elder care conversations and how to care for aging parents.

Disclaimer: This podcast and all related content are for educational purposes only and do not constitute legal advice. No attorney-client relationship is established here. Use of this information without careful analysis and review by your attorney, CPA, and/or financial advisor may cause serious adverse consequences. For legal guidance tailored to your unique situation, consult with a licensed attorney in your state.