Irrevocable Life Insurance Trusts

Donald O. Jansen (Retired Senior Partner, Fulbright & Jaworski, L.L.P., Houston, Texas) has recently published his article entitled Giving Birth to, Caring for, and Feeding the Irrevocable Life Insurance Trust, 41 Real Prop. Prob. & Tr. J. 571 (2006).

Here is the editors’ synopsis:

This Article discusses the irrevocable life insurance trust–one way in which individuals can protect the liquidity produced by life insurance proceeds from estate and generation-skipping taxes. The author describes the advantages and disadvantages of the irrevocable life insurance trust and provides possible solutions to gift, estate, and generation-skipping transfer problems that may arise. The ability of a life insurance trust to serve as a family bank, possibly for generations, protected from spendthrift beneficiaries and claims of creditors, is just one example of why the life insurance trust is an important part of the estate planner’s tool kit.