Testimonials

"When I brought my parents out here ten years ago, we hired the Farr Law Firm on a life time retainer to take care of us. Over the ensuing years, Evan Farr issued precise directions on keeping records, transfers, what to do and not to do within the system, and gave careful advice that provided peace of mind and saved us thousands of dollars in the end. At the end of my mother's life, Karen Simpson, the paralegal was particularly great, even coming to my mother's wake, which I greatly appreciated. The Farr Law Firm really stuck with me and my family throughout and after.."
- John Robilette (Fairfax, VA)

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Irrevocable Life Insurance Trusts

Irrevocable Life Insurance Trust:
A popular type of ILIT for saving estate tax is the irrevocable life insurance trust. It works this way: you transfer ownership of your life insurance policy to an ILIT for the benefit of your spouse and children. When you die, the life insurance proceeds are paid to the life insurance trust. The trustee then manages and distributes the proceeds according to the trust instrument. If you die more than three years after the transfer, the life insurance proceeds will not be included in the calculation of your estate tax. If you die within the three-year period, the proceeds will be included in your gross estate. This three year look-back rule for life insurance transfers may be avoided by creating the trust first and having the trust purchase the life insurance policy. The irrevocable life insurance trust is especially attractive because it does not require giving away your assets other than what may be necessary to arrange for payment of annual premiums. Careful planning must be undertaken to ensure that all tax law requirements are met.