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i don't think it has a detrimental effect on your chances of admission
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Simple English definitions for legal terms
life insurance trust
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A quick definition of life insurance trust:
A life insurance trust is a special type of trust that helps people protect the benefits from a life insurance policy from estate taxes. It is a way to make sure that the money from the policy goes to the people the insured person wants it to go to, without being taxed too much. Once the trust is created, it cannot be changed, which means that the benefits from the policy are safe from taxes. The trust also allows the insured person to choose how the money is managed and distributed to the beneficiaries, so that it is used in the best way possible.
A more thorough explanation:
A life insurance trust is a type of trust that helps individuals ensure that the benefits from a life insurance policy can avoid estate taxes and be distributed according to their wishes. This type of trust is also known as an irrevocable life insurance trust (ILIT) because it cannot be changed or undone after it is created.
Without a life insurance trust, the benefits from a life insurance policy could be subject to both state and federal estate taxes if they exceed the applicable exclusion amount. By creating a life insurance trust, the insured can avoid these taxes and ensure that their beneficiaries receive the full benefits of the policy.
In addition to tax benefits, a life insurance trust allows the insured to choose a manager of assets and determine how the beneficiaries receive them. For example, the trustee can be instructed to prevent beneficiaries from wasting the benefits or to distribute the assets among beneficiaries based on their needs.
John wants to ensure that his wife and children receive the full benefits of his life insurance policy without having to pay estate taxes. He creates an irrevocable life insurance trust and names his wife as the primary beneficiary and his children as secondary beneficiaries. He also appoints a trustee to manage the assets and distribute them according to his wishes.
By creating a life insurance trust, John can ensure that his family receives the full benefits of his policy without having to worry about estate taxes. He can also rest assured that the assets will be managed and distributed according to his wishes.