An Irrevocable Life Insurance Trust (ILIT) is an irrevocable trust established in order to own life insurance on the life of the settlor of the ILIT. Normally, the proceeds of the life insurance policies on an individual’s life are includable in that person’s gross estate when a person dies. If the ILIT owns the policy and the settlor holds no incidents of ownership, the proceeds of the life insurance policy are not includable in the settlor’s estate. The reason for this is because the ILIT is a separate entity from the settlor.
A review of Masry v. Masry (2008) 166 Cal.App.4th 738
Edward and Joette Masry created a revocable living trust (Family Trust). The property transferred to the trust was community property as it was acquired during marriage. The trust named Edward and Joette each as a trustor (settlor) and trustee of the trust and reserved the right of each to revoke the trust “by written direction delivered to the other Trustor and to the Trustee.” (more…)
The primary role of an attorney in providing counsel to a client is to represent the client’s interests. However, there may come a time when the client becomes incapacitated and is no longer capable of acting in his or her best interest or following the advice of the attorney guiding the client to proceed in the client’s best interest. Incapacity can result from mental illness, substance abuse, or physical ailments which prohibit the client from exercising sound judgment and protecting his or her interests. Lack of capacity issues are of particular concern to trusts and estates attorneys as many of their clients are elderly and may have medical problems, particularly the onset of dementia. (more…)