Legal Question in Wills and Trusts in Texas
I created an ILIT with my children as beneficiaries. I also own a small business. For gifting to the ILIT, I'm told I need to write a check to the trust, let it sit there, and then after 30 days or so have the trustee pay the premiums of the life insurance from the trust account. Can I write a check from the business to the trust since that's where all the money is coming from anyway? Or does it need to be from my personal account? Any assistance is greatly appreciated.
2 Answers from Attorneys
In order to get the best possible mileage out of an ILIT, I would strongly suggest that you contact the attorney who assisted you in doing this. There are very specific ways of making a gift to this trust that is considered a gift. If you don't do it correctly, there will be adverse consequences down the road.
Annual cash gifts should be made to the children. Once the children have the gifts, they can pay the premiums with THEIR money. This is very important to pay the premiums properly because not doing so can destroy the tax benefits of this trust. Review this with your attorney.
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