when life insurance is owned by an ILIT, the proceeds from the death benefit are not part of the insured's gross estate and thus not subject to state and federal estate taxation.
However, when the grantor dies, the revocable trust becomes irrevocable and cannot be changed. These trusts are designed to terminate upon the grantor’s death, at which time, the assets are distributed to beneficiaries. Those assets are valued as of the grantor’s death date. There are no p...
Thornton, ClaireJournal of Financial Planning
is a full service commercial real estate brokerage firm, headquartered in Conshohocken, Pennsylvania, with five other offices in eastern Pennsylvania and southern New Jersey. The Recoupling of Decoupling about the decoupling of state and federal death taxes. Briefly, to maintain the death tax revenue...
Deductions and Taxation Responsibilities Revocable trusts become irrevocable, or unchangeable, when the grantor dies. If you're the beneficiary of a previously revocable trust, the tax responsibility for any income, gains or assets of the trust falls on you now that the trust is irrevocable. ...
orgrantor,to minimize any estate taxes, protect the money or other assets from creditors, and allow the assets to earn income for the benefit of the beneficiary. Understanding the taxation of irrevocable trust distributions to beneficiaries is critical for all who may be involved in a similar pro...