Irrevocable Life Insurance Trust
High net worth individuals are often advised to own their life insurance policies in trust. Doing so keeps death benefit dollars out of their taxable estates and asset-protected for beneficiaries. As a professional trustee, we work with you to ensure the terms of these trusts are respected and that the trusts are administered correctly. This includes ensuring that Crummey letters (if applicable) are sent out on time, that premiums are paid correctly and on time, and that the grantor does not exercise control over the policy or trust. Failure to administer these life insurance trusts correctly could be costly for the family. Policy death benefits could be brought back into the grantor’s taxable estate, forcing up to 40% of the death benefit proceeds to be paid to the IRS in the form of inheritance taxes and somewhat defeating the purpose and leverage of the insurance policy. At First Covenant Trust, we are able to serve as trustee of your family’s irrevocable life insurance trust (ILIT), working alongside you, your advisors and the insurance company to make sure all is administered professionally and correctly. After you’re gone, we can oversee the investments and distributions of policy proceeds for your loved ones, in accordance with your wishes. Our fees to serve as trustee of an ILIT start as low as $1,500 per year.