Life Insurance Trusts

Life insurance can be a crucial safety net for your family in the event that you are unexpectedly taken from them. Life insurance helps make up for the loss of your income, and can keep your family from dealing with financial hardship on top of the emotional hardship of losing a spouse or parent.

However, there are certain circumstances in which a life insurance trust may be the best way to structure your life insurance benefits. The trust and estate attorneys of Saidis Sullivan and Rogers can help you determine if your family could benefit from a life insurance trust.

Benefits of a Life Insurance Trust for Your Children

If you have young children, their well-being is likely your top priority in creating your end-of-life plans. While a life insurance policy is certainly a good choice to provide for your kids, it is important to consider what would happen if you were to pass away before they reach adulthood. It may be uncomfortable to consider this possibility, but you’ll feel much better knowing that you’ve prepared for the unexpected with thorough estate planning.

Creating a life insurance trust allows you to direct how your life insurance benefits will be distributed, which is especially helpful if you have young children. For example, a life insurance trust can invest and protect your life insurance benefits until your kids are responsible enough to have control over those funds. A life insurance trust can also help you provide for a child who is disabled or otherwise not able to manage his or her own money.

Tax Benefits of Life Insurance Trusts

In addition to peace of mind, there are also important tax benefits to creating a life insurance trust. If you currently have or expect to have enough assets that your life insurance benefits would make your estate subject to estate tax, a life insurance trust can help relieve your family’s tax burden.

Under normal circumstances, your life insurance benefits are counted as part of your taxable estate. A life insurance trust provides your family with liquid assets while shielding your insurance benefits from the estate tax. However, the tax benefit of a life insurance trust depends heavily on your assets and other complicating factors, so our estate planning attorneys will help you decide if a life insurance trust is really the best way to provide for your family.

The trust and estate attorneys of Saidis Sullivan and Rogers can help you with all of your end-of-life planning. We’ll help you weigh the costs and benefits of instruments such as Wills, living trusts, and life insurance trusts to determine which combination will give you the most peace of mind.

To learn more about the benefits of a life insurance trust in Pennsylvania, please contact the estate and trust attorneys of Saidis Sullivan and Rogers today to schedule your end-of-life planning session.