Life insurance can be used as a funding vehicle to maximize your clients’ wealth and pass it on to the people or causes that are important to them with less risk and the potential for greater tax efficiency.

One of the most common ways of using life insurance in a wealth transfer plan is to use it in conjunction with an irrevocable trust. When owned by a properly structured irrevocable trust, the death benefit from a life insurance policy can provide liquidity to offset federal or state wealth transfer taxes. It can also prevent a forced sale by purchasing assets from your client’s estate or by lending money to the estate. The trust becomes the owner and beneficiary of an insurance policy on your client’s life, allowing the death benefit to pass outside of the estate and be distributed based on your client’s wishes, as dictated by the trust.

We work closely with estate planning attorneys to draft specific types of irrevocable trusts based on the clients’ family, business and/or philanthropic goals. The following are examples of tools that we use to: