The bottom line Professional trustee versus family trustee for an ilit is a choice about administration, but neither label guarantees estate-tax treatment. For life-insurance proceeds, the key federal question is whether you possessed incidents of ownership at death, as 26 U.S.C. §2042 explains. Compare candidates against that rule, your trust document, and qualified advice. An … Read more

The bottom line Life insurance trust options for leaving money to grandchildren begin with who owns the policy and which rights that person keeps. An irrevocable life insurance trust (ILIT) may fit an estate plan, but the label alone does not control the result. Under IRC 2042, retained incidents of ownership can keep proceeds in … Read more

The bottom line For a child’s life insurance inheritance, the trust versus utma account for a child’s life insurance inheritance decision turns on control and ownership. A trust can set distribution terms through a trustee. A UTMA transfer uses a custodian until the age set by state law. Neither label alone decides estate-tax treatment. The … Read more