St. Petersburg Life Insurance Trust Attorney
Life insurance is a prominent part of many estate plans. In the typical policy, an insured will name beneficiaries who will receive proceeds in the event of a payout. But in some situations, it makes sense to place the life insurance policy inside a trust. Many clients will reap tax advantages by doing so, while retaining the ability to control how proceeds are distributed. Contact Fisher & Wilsey, P.A. to discuss whether you should purchase life insurance and whether to hold it in a trust. Our St. Petersburg life insurance trust attorneys can discuss the best way to accomplish your estate planning objectives.
Creating a Life Insurance Trust
Anyone interested in a life insurance trust should find a law firm with deep experience in trust creation. You want to create the foundational legal document (the trust) the correct way. There are critical state laws which require compliance.
Our firm:
- Can discuss whether a life insurance trust is right for you.
- Review your entire estate plan to see where a life insurance trust fits in.
- Revise a current estate plan, if necessary, to account for changed goals or objectives.
- Create a trust document and name an appropriate trustee.
- Find an appropriate life insurance policy and pay the premium.
By using a trust, our clients can maintain control over how proceeds are distributed to beneficiaries under the policy. For example, you can decide how much money the trust will pay out each year to beneficiaries, as well as what expenses the beneficiaries can spend the money on, such as college expenses. This type of control is an attractive feature of a trust and what makes it different from simply purchasing life insurance and holding it outside a trust.
Must the Trust Be Irrevocable?
Once created, an irrevocable trust is difficult to change. For this reason, our clients should think carefully about whether they want to create an irrevocable life insurance trust. There is no going back to seize control of the trust assets if you change your mind or if your financial position alters.
An alternative is to hold the policy in a living trust, but there will be tax consequences. The death benefit will be part of your overall estate when you pass, and heirs could potentially end up paying estate tax on the proceeds. Placing the insurance policy in an irrevocable trust makes the trust the legal owner. Any proceeds from the policy are not included in the deceased’s gross estate.
An irrevocable trust is the right choice for those focused mainly on minimizing taxation, but that might not be a primary concern. After all, few estates are subject to estate tax. Let’s discuss if the option makes sense for you, and if there are other ways to modify an estate plan to garner tax advantages.
Speak With an Attorney
Irrevocable trusts are powerful estate planning tools, and we encourage anyone interested to hire a law firm with substantial experience in trust creation. Call Fisher & Wilsey, P.A. to speak with a St. Petersburg life insurance trust attorney about your estate planning needs.
