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An Irrevocable Life Insurance Trust (ILIT) is a popular estate-planning tool designed to minimize estate taxes by moving life insurance proceeds outside of the estate.
In eMoney, you can model an existing ILIT for your clients in Advanced Facts, or create a scenario in Plans to show the impact an ILIT would have on their financial plan.
Let’s look at entering an existing ILIT in the Advanced Facts. First, you’ll want to add the life insurance policy under Insurance > Life. Next, follow these steps:
After you enter the ILIT, you’ll want to go back to the life insurance policy you previously added and follow these steps:
To recommend an ILIT to your clients and show the impact it will have on their estate, you’ll want to use Plans. Navigate to Plans, add a new scenario, and then follow the steps below.
To transfer an existing life insurance policy into a new ILIT:
Please note, that when transferring an existing policy into a new ILIT, a three-year limitation rule applies. This means the life insurance proceeds will not show up out of the estate until three years after the transfer occurs.
To add a new life insurance policy into a new ILIT:
Now, you can view the client’s new ILIT in their reports. Some of the best reports and tools to use are the Estate Plan Technique > ILIT Analysis report, the Flow Charts report, and the Distribution Center.