Hey all,
A good friend and client recently shared that he has policies on his 3 kids (late teens to early 20's) which he has been paying into for 10+ years and all of which have large death benefits and significant cash value...
Around 2 years ago another advisor/attorney had him change the ownership (and beneficiary) of those policies to be my client's ILIT of which his wife is the trustee...Am I missing something? I can't see what the benefit of this is and in fact, think it may have been a huge mistake. And, if so, why would he keep paying and building up cash in those policies when the "kids" will not be able to benefit.
He has 2 policies on his own life which are owned by the ILIT - for estate tax purposes - which I get....but I'm just not comprehended why that ILIT would own the kids' policies.
Again, I may be missing something and will be reaching out to a few estate attorney friends....but figured I'd ask this group as well.
A good friend and client recently shared that he has policies on his 3 kids (late teens to early 20's) which he has been paying into for 10+ years and all of which have large death benefits and significant cash value...
Around 2 years ago another advisor/attorney had him change the ownership (and beneficiary) of those policies to be my client's ILIT of which his wife is the trustee...Am I missing something? I can't see what the benefit of this is and in fact, think it may have been a huge mistake. And, if so, why would he keep paying and building up cash in those policies when the "kids" will not be able to benefit.
He has 2 policies on his own life which are owned by the ILIT - for estate tax purposes - which I get....but I'm just not comprehended why that ILIT would own the kids' policies.
Again, I may be missing something and will be reaching out to a few estate attorney friends....but figured I'd ask this group as well.