People create life insurance trusts because they want more control over their life insurance policies, ensuring that the payouts go to a designated beneficiary. This explanation may seem straightforward enough, but you deserve to know the ins and outs of all the factors that come with estate planning. Today, we will detail what life insurance trusts are and include some benefits of opting for a life insurance trust.
The Three Primary Components of Life Insurance Trusts
- The Grantor: The creator of the trust; you.
- The Trustee: A trustee is a person that you pick to manage your trust, follow through on your wishes, and should always have your best interest at heart.
- The beneficiary can be a person, institution, or estate that receives money under a contract, in this case, a life insurance policy. When you name a beneficiary, it ensures that your assets go to them if you pass.
The Benefits of a Life Insurance Trust
The benefit of any trust is that you can avoid court interference in a process called probate. For example, suppose you name a spouse as a beneficiary, and they become incapacitated at the time of your passing. In that case, the court may try to control the money through court supervision. However, if you name your trust as the beneficiary of the policy, the trustee can use the assets to provide for your spouse without court interference.
Also, if you name your kids as beneficiaries and minors at the time, the life insurance company will not be able to pay out any money immediately. The court will have to appoint a guardian first. Under the Uniform Transfers to Minors Act (UTMA), a life insurance company will allow you to designate an adult custodian that will manage the policy until your kids reach legal age.
Further, there are many estate tax advantages to purchasing life insurance through an Irrevocable Life Insurance Trust, which can save your estate a tax of up to forty percent (40%) on the benefits received by your beneficiaries.
The Advantages of Hiring Millman Law Group to Administer Your Trust
When you hire an estate planning attorney, we will ensure that your goals are fully actualized. Estate planning is not a one-size-fits-all process. Millman Law Group PLLC can help you determine the best solutions for your needs. Furthermore, setting up a trust is more complicated than setting up a will because it takes more steps to ensure that it’s legally compliant and that’s it’s appropriately funded. An estate planning lawyer can also lay out the details of a trustee’s responsibilities. Therefore, helping you make a better decision about who you want your trustee to be. Finally, an estate planning attorney can keep your estate up-to-date. Think of hiring us as a frictionless way to ensure your desires come first.
YOU CAN “TRUST” MILLMAN LAW GROUP TO ADMINISTER YOUR TRUSTS
Millman Law Group, PLLC is rare because it’s one of the only law firms that offer life planning in South Florida. From life care planning to the preparation of detailed estate plans, Millman Law Group has committed to serving Floridian elderly communities in Boca Raton, Palm Beach County, Ocean Ridge, Hillsboro Beach, and many other areas since 2018. Our dedicated team also specializes in special needs trusts and catering to any age demographic because we know for certain it’s never too early to start preparing you and your family for your future. For the latest news in estate planning and elder care law, follow us on Facebook, Twitter, Linked In, and Pinterest. You can also contact us at 561-463-6480.