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Grantor Access to Funds In an Irrevocable Life Insurance Trust Serious estate tax repeal is finally before Congress. If it passes, it will be phased in over eight to ten years; however, most commentators are convinced (including this one) that full repeal will not take place. Instead, at a minimum, the unified credit will be immediately increased to $1,000,000 per person and, perhaps, raised to $2,000,000 per person over time. In addition, the top federal and estate gift tax rates themselves may well be reduced, and the annual exclusion (currently $10,000) may be increased. On one hand, this is good news as it will increase the dollars available for tax free funding of wealth preservation planning. On the other hand, it makes planning during the next several months difficult since the long-range rules of the game are now unknown. One thing we do know is this: Planning strategies should continue to be implemented since, even with full repeal, if death occurs over the next several years, the IRS will still show up nine months later expecting to be paid. Another planning feature that needs to be addressed is a client's concerns about financial needs later in life as many people fear running out of money far more than they fear estate taxes. Regarding either of the above issues, powerful strategies could be implemented with much less worry if a way existed to "plan now and modify later" as: 1) new estate tax rules take effect or 2) funds placed in irrevocable trusts are needed later. Fortunately, such strategies do exist. Click here for a report named Grantor Access to Funds in an Irrevocable Life Insurance Trust which includes four strategies that your clients and their advisers should be considering, any one of which can make irrevocable planning much less irrevocable. |
