When designed and implemented properly, a life insurance contract can provide exceptional economic benefit in the funding of client goals.
Life insurance policies are often acquired outside of the client’s taxable estate, via a trust, to maximize the benefits provided. Among these trusts are (ILITs), GRATs and Generation Skipping (Dynasty) trusts.
Often, these contracts are funded by assets that have been transferred to the trust as part of the overall estate plan.
Other common funding methods involve utilizing the lifetime exemption, annual exclusion gifts, private loans, premium finance arrangements, and Private Split-Dollar Plans.