Page 33 - Thomas F. Dalton Funeral Homes

circumstance . At the time of writing, the period is ve years . Had Rose gone into the nursing home within that window, she would have been subject to a penalty.
As such, it is essential to plan as far in advance of any major medical ailment as possible. It is never too soon to plan. As the above example demonstrates, proper planning, is tremendously bene cial to your loved ones, and can be the difference between leaving a substantial nancial legacy to bene t your family, or paying that money over to the government, or other unrelated third parties.
The Irrevocable Life Insurance Trust (“/LIT”) is a unique instrument that serves several important purposes, two of which we will touch on here. Many people are unaware that the proceeds of life insurance policies are considered part of your estate for estate tax purposes. By using a properly drafted / LIT, however, you will bring the value of any life insurance polices you might hold outside of your estate for estate tax purposes on both the state and federal level. For those of you whose net worth puts them at
or near the estate tax threshold, an ILIT is a necessary part of your estate plan.
An ILIT will also permit you to direct the disposition of your life insurance proceeds in a more speci c manner than simply designating a bene ciary. Frequently, our clients have their ILIT bene t their spouse during the spouse’s lifetime, and upon the death of the spouse, bene t the children of their marriage. Since an ILIT is a trust, you can give speci c directions in your trust instrument as to how the assets should be used, and protect the assets from your heirs’ potential creditors.
The following documents should be brought to your attorney after the demise of a loved one:
1. An original or certi ed copy of a death certi cate (look for a raised seal)
2 The original will (if any)
3. A funeral bill marked “ Paid”
4 . A basic family tree with contact information for close relatives
Irrevocable Life Insurance Trusts
Estate Administration
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