Ohio National Financial Services, Estate Planning

A properly arranged irrevocable life insurance trust can be used to keep the proceeds out of the insured's estate, so that they will not add to the estate tax burden. Through loans to the estate, or the purchase of assets by the trust from the estate (presumably, under terms that are favorable to the estate), the life insurance proceeds can then be made available to pay the estate settlement bill.

In addition, an ILIT can be arranged to avoid taxation of the proceeds in the surviving spouse's estate, while still providing the surviving spouse with a life income. This requires the use of the marital deduction and other types of trusts that are discussed more fully in Section V (Tools of the Trade).

More Information on ILITs

Irrevocable life insurance trusts are fully described in the Estate Planning Adviser's Guide (Form 2450). This guide also provides two specimen trust agreements. Remember that specimen agreements such as these are provided to assist the client's attorney in drafting insurance-related legal documents. They are not intended to replace the services of an attorney.

Ohio National is not affiliated with, nor does it endorse or sponsor, any particular prospecting, marketing or selling system.