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Advanced estate planning techniques

On Behalf of | Sep 7, 2021 | blog, Estate Planning |

Estate planning can be complicated, but it may improve your quality of life and help ensure financial freedom and peace of mind for your benefactors. If you’re a Connecticut resident, here are some ways that advanced estate planning can benefit you and your family.

Consider an irrevocable life insurance trust

In most cases, the value of your life insurance policy is part of your taxable estate if you own the policy. The proceeds of the insurance policy are subject to federal estate taxes. An ILIT is a trust that can’t be revoked and serves as both beneficiary and owner of insurance policies on the policy holder’s life. An ILIT is created for the benefit of someone other than the policy holder.

Think about an IRA preservation trust

An IRA preservation trust is an advanced estate planning option that allows your beneficiaries to receive your IRAs once you have passed away. An IRA PT ensures that the beneficiary will receive distributions over their lifetime that are protected from creditors. The IRA PT prevents the termination of governmental benefits to beneficiaries with special needs and is ideal for minor beneficiaries. Your surviving spouse can still be the primary beneficiary for this trust.

See if a build-up equity retirement trust is right for you

BERT is another advanced estate planning tool that is classified as an irrevocable trust. The funds are saved due to yearly exclusion and provide funds for your spouse once you pass away. The money in a BERT is excluded from estate taxes.

The assets in a trust are exempt from estate and gift taxes, and the money can serve as a nest egg for your surviving spouse. When your surviving spouse passes away, the financial distributions are tax-free. BERT funds are also protected from creditors for spouses and children as soon as the trust is established.

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