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Life Insurance Reviews

On Behalf of | Jan 23, 2018 | Blog Posts |

Passing along some useful information this time. Our friends over at have recently done a write-up on life insurance, and reviewed a few major providers, which can be found here:

We would like to add the following information about how this all interacts with your estate plan. Life insurances tends to be passed down in one of three major ways:

  1. Naming designated beneficiaries directly: This defines a person to get cash from the policy when you pass on.
  2. Naming your revocable living trust as the beneficiary: Revocable living trusts provide a way to lump your estate’s assets and debts together to be handled all in one efficient process. This is why our general advise for anyone with a trust-based estate plan and who is not going to pay any estate tax is to name the trust as the primary beneficiary. With the new rules, fewer people than ever will be paying estate tax, so this is increasingly the best option for the majority of Californians.
  3. Creating and naming an irrevocable trust just for your life insurance (known as an ILIT): This technique is used to move the value of a life insurance policy outside of a taxpayer’s estate for the purposes of estate and gift taxes. You do a separate trust just for your life insurance, and it interacts with your other revocable living trust to help pay your estate’s debts. Right now, this is generally more costly than it is worth unless you know you will be paying estate tax, but where it is needed the tax savings can be quite large.

If you are unsure which option is best for you, then feel free to give us a call and we can help guide you through deciding which vehicle is right to transport your life insurance to your loved ones.



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