Legal Question in Wills and Trusts in Maryland
Irrevocable Life Insurance Trust
I currently am the owner of a 300K term insurance policy with the Federal Govt. (FEGLI) with my wife as beneficiary. I have read enough about these trusts to be "dangerous" and would certainly have one professionally prepared however my question is:
Does the fact that premiums are automatically withheld from my paycheck every two weeks (and there is no way around this) make a valid trust a very remote possibility ?
If not a remote possibility, would I need to write "gift" letters every two weeks ?
Thanks Much
1 Answer from Attorneys
Re: Irrevocable Life Insurance Trust
Yes, it looks quite likely that the IRS would find that you're still in control of the trust, and thus still part of your taxable estate. As long as you're in control, it's part of your estate.