• Supporting Our Clients and the Community During the COVID-19 Pandemic.
    • Skip to primary navigation
    • Skip to main content
    • Skip to primary sidebar
    • Skip to footer
    • Home
    • Our Firm
      • About Our Firm
      • Attorney and Staff Profiles
      • Communities We Serve
        • Bergen County
        • Clifton
        • Essex County
        • Hudson County
        • Hunterdon County
        • Middlesex County
          • Edison
          • Woodbridge
        • Morris County
        • Passaic County
        • Somerset County
          • Hillsborough
          • Warren
        • Sussex County
          • Franklin
        • Union County
          • Plainfield
    • Services
      • Asset & Business Planning
      • Estate And Gift Tax Figures
      • Estate Planning Services
      • Incapacity Planning
      • IRA & Retirement Planning
      • Legacy Planning Services
      • Medicaid and Elder Law
      • SECURE Act
      • Special Needs Planning
      • Trust Administration
    • Seminars
    • Resources
      • Elder Law
        • Elder Law & Medicaid Definitions
        • Elder Law reports
        • Elder Law Resources
          • Plainfield Elder Law
      • Estate Planning
        • Estate Planning Checkup
        • Estate Planning Definitions
        • Incapacity Planning Definitions
        • Is Your Estate Plan Outdated?
        • New Jersey Estate Planning Resources
        • Top 10 Estate and Legacy Planning Techniques
      • Free Estate Planning Worksheet
      • Free Seminars
      • Frequently Asked Questions
        • Business Succession Planning
        • Estate Planning
        • Elder Law
        • Estate Planning for Women
        • Frequently Asked Questions for Families Without an Estate Plan
        • Legacy Wealth Planning
        • LGBTQ Estate Planning
        • Medicaid
        • Trust Administration & Probate
        • Wills and Trusts
      • Newsletters
      • Pre Consultation Form
      • Probate and Trust Administration
        • Bereavement Resources
        • How to Know if You Need Extra Help With Your Grieving
        • Loss of a Loved One
        • Probate Resources
          • Hillsborough Township Probate
          • Plainfield Probate
        • The Mourner’s Bill of Rights
        • Things You Need To Do When a Loved One Passes Away With a Trust
        • Things You Need To Do When a Loved One Passes Away With a Will
        • Trust Administration & Probate Definitions
      • Published Books
    • Reviews
      • Our Reviews
      • Review Us
    • Blog
    • Contact Us

    Augulis Law Firm

    New Jersey Estate Planning Information Center

    Connect with us today(908) 222-8803

    • Attend A Seminar
      • Attend A Webinar
    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    Committed to helping New Jersey families preserve and protect their wealth.
    Home » Estate Planning » Transferring Policies Into an ILIT

    Transferring Policies Into an ILIT

    August 20, 2012Estate Planning, Wills and Trusts

    Central New Jersey estate planning attorneys are always going to emphasize the importance of planning ahead even as a relatively young adult. One of the reasons is because of the fact that there are no guarantees and you never know exactly how long you will live. Unfortunately, people of all ages pass away every day and they leave families behind.

    But in addition to protecting your family in the event of an unexpected catastrophic accident or illness planning ahead can provide certain logistic benefits. This is something to take into consideration when you are purchasing life insurance.

    A lot of people are under the impression that life insurance proceeds are transferred outside of taxation but this is not entirely correct. Yes, it is true that the beneficiary of life insurance proceeds does not have to pay income tax on the proceeds. But, if you were the owner of the policies they are part of your estate for estate tax purposes.

    On the other hand, if you were to create an irrevocable life insurance trust you could have the trust purchase the policies and the proceeds would no longer be considered to be a taxable portion of your estate.

    A question arises: Can you transfer existing policies into such a trust? The answer is yes, but there is a caveat. If you were to pass away within three years of placing the policies into the trust the proceeds would in fact be subject to the estate tax. This is why it is better to plan ahead with foresight and have the trust purchase the policies in the first place.

    • Author
    • Recent Posts
    Alan Augulis, Estate Planning Attorney
    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.
    Latest posts by Alan Augulis, Estate Planning Attorney (see all)
    • Important Subjects to Discuss with Your Estate Planning Attorney - January 23, 2023
    • Planning for the Possibility of Dementia - January 20, 2023
    • How to Prepare for Retirement - January 17, 2023

    About Alan Augulis, Estate Planning Attorney

    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

    Primary Sidebar

    Augulis Law Firm

    Free Estate Planning Worksheet

    There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

    • This field is for validation purposes and should be left unchanged.

    Follow Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram

    Testimonials

    Client Review
    August 4, 2020
        

    Very happy with work. Everything explained clearly and concisely and all my questions were answered completely. Process of putting together plan and review of documents was very organized and easy to understand.

    norm

    Blog Subscription

    • This field is for validation purposes and should be left unchanged.

    Where we are

    Augulis Law Firm
    5 Mountain Blvd. Suite 5
    Warren Twp, NJ 07059
    Phone: (908) 222-8803
    Fax: (908) 222-8815

    See Larger Map Get Directions

    Office Hours

    Monday9:00 AM - 5:00 PM
    Tuesday9:00 AM - 5:00 PM
    Wednesday9:00 AM - 5:00 PM
    Thursday9:00 AM - 5:00 PM
    Friday9:00 AM - 5:00 PM

    Map

    map

    Footer

    • Advantages of Working With Our Firm
    • Disclaimer
    • Privacy Policy
    • Sitemap
    • Contact Us

    Connect with Us

    • Facebook
    • Twitter
    • Linkdin
    • Youtube
    • Instagram
    footer-logo

    Augulis Law Firm
    All Right Reseved.

    Attorney Advertisement

    © 2023 American Academy of Estate Planning Attorneys, Inc.