Estate Planning

    In the simplest of terms, a trust is an arrangement where property is managed by one person for the benefit of another.  If you have accumulated
    significant wealth over the years, a good estate plan defines how you will build, preserve, and allocate that wealth.

    With a life insurance trust, the trust is both the owner and the beneficiary of one or more life insurance policies. Upon the death of the insured, the
    death benefit proceeds are available to indirectly provide cash needed to pay final expenses and estate taxes.

Build – Outpace inflation and grow assets.
Preserve – Prepare for estate taxes, probate costs, and pay off debts that can eat away at wealth.
Allocate – Ensure the inheritance is optimally balanced for all heirs.

    Survivorship life insurance may help your attain all three of these goals. The key aspect that makes a life insurance trust desirable is that when
    properly executed, the death benefit proceeds are not included in the taxable estate. A survivorship life insurance policy is an extremely efficient
    way to plan for estate taxes.

    Points to consider about a Life Insurance Trust

 The trust applies for and owns the policy, thereby keeping the proceeds out of both spouses’ taxable estates.
  If an existing policy is transferred to the trust, estate tax exclusion may be achieved three years after the transfer.
  Upon the first death, the unlimited marital deduction allows the property to pass free of estate tax to the spouse.
  In most situations, the trust’s beneficiaries have the right to demand withdrawals of contributions to the trust.
  This right must be communicated to the beneficiaries when a gift is made to the trust. However, when beneficiaries are properly educated    
at the time the trust is created, they generally understand that making a demand withdrawal is not in their best interest.

    As the beneficiary of the life insurance policy, the trust receives death benefit proceeds free of federal income taxes and estate taxes. The death
    proceeds may be used to indirectly provide the cash needed to pay estate taxes and other obligations.  To discuss how RCC can help you, contact
    us today.
Estate Planning
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