Talking with your clients about building a solid estate plan that includes trusts can sometimes be easier said than done. Knowing the right questions to ask can make all the difference. Let’s look at some specific scenarios that could impact your clients and ways to get a conversation started to come up with an estate plan.
John is interested in a strategy that can protect his life insurance proceeds from estate taxation. If he uses an ILIT as a tool, not only would his life insurance proceeds escape estate taxation, but since a trust is a set of instructions created by him, the trust can protect his heirs from claims of creditors and perhaps the spendthrift ways of one or more of his beneficiaries.
Bob likes all the benefits a trust ownership offers him, plus the ability to maintain limited access to the cash values through his spouse. By creating a spousal limited access trust with his wife Brenda as the trustee, his spouse will have limited access to the cash values during his life. Even with this flexibility, the trust assets enjoy estate tax protection.
Cathy is the beneficiary of her deceased spouse’s trust and defers the income because she does not need it. She is interested in a strategy that would enhance the net after-tax amount transferred to her heirs. If the trust allows — but does not require — the spouse to take income, perhaps having the trust obtain insurance on the surviving spouse would be advisable. If designed properly, this strategy could offer her a tax-free result.
Sam is interested in a strategy that would allow him to spread out his capital gains tax costs while also benefitting his favorite charity. Gifting appreciated assets to a charitable remainder trust may be attractive, as the tax cost can be spread and perhaps received in lower brackets. A tax deduction may also be obtained. Keep in mind at the end of the term or at time of death, the remaining assets in the trust transfer to the charity. A wealth replacement trust with life insurance rounds out this planning technique to make heirs’ distributions whole.
It’s important for the grantor to choose a trustee that will manage their trust successfully. And it’s important for financial professionals to keep communication open with those trustees. Our Trustee Letter helps you offer support to trustees to ensure their policies are on track to accomplish the grantor’s estate planning goals.
Ready to help clients protect their legacy with trust-owned life insurance?
Email us at TOLI@LFG.com or call us at 800-832-5372.
©2024 Lincoln National Corporation
Any tax information contained in this communication, while presented in good faith, is general in nature and is not intended to be a rendering of legal, accounting or tax advice and should not be used without the advice and guidance of a professional Tax Advisor. Furthermore, the information contained herein may not be applicable or suitable to an individual’s specific circumstances or needs and may require consideration of other matters.
Important information
This material is intended for informational and educational purposes only. It is not intended to be investment, legal, or tax advice. Work with your financial, legal and tax professionals for guidance.
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives and/or insurance agents do not provide tax, accounting or legal advice. Please consult an independent professional as to any tax, accounting or legal statements made herein.
Affiliates include broker-dealer/distributor Lincoln Financial Distributors, Inc., Radnor, PA, and insurance company affiliates The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY.
LCN-6060122-103023
5/24 Z08
Order code: LIF-TOLID-IDE001
For financial professional use only. Not for use with the public.
Talking with your clients about building a solid estate plan that includes trusts can sometimes be easier said than done. Knowing the right questions to ask can make all the difference. Let’s look at some specific scenarios that could impact your clients and ways to get a conversation started to come up with an estate plan.
John is interested in a strategy that can protect his life insurance proceeds from estate taxation. If he uses an ILIT as a tool, not only would his life insurance proceeds escape estate taxation, but since a trust is a set of instructions created by him, the trust can protect his heirs from claims of creditors and perhaps the spendthrift ways of one or more of his beneficiaries.
Bob likes all the benefits a trust ownership offers him, plus the ability to maintain limited access to the cash values through his spouse. By creating a spousal limited access trust with his wife Brenda as the trustee, his spouse will have limited access to the cash values during his life. Even with this flexibility, the trust assets enjoy estate tax protection.
Cathy is the beneficiary of her deceased spouse’s trust and defers the income because she does not need it. She is interested in a strategy that would enhance the net after-tax amount transferred to her heirs. If the trust allows — but does not require — the spouse to take income, perhaps having the trust obtain insurance on the surviving spouse would be advisable. If designed properly, this strategy could offer her a tax-free result.
Sam is interested in a strategy that would allow him to spread out his capital gains tax costs while also benefitting his favorite charity. Gifting appreciated assets to a charitable remainder trust may be attractive, as the tax cost can be spread and perhaps received in lower brackets. A tax deduction may also be obtained. Keep in mind at the end of the term or at time of death, the remaining assets in the trust transfer to the charity. A wealth replacement trust with life insurance rounds out this planning technique to make heirs’ distributions whole.
It’s important for the grantor to choose a trustee that will manage their trust successfully. And it’s important for financial professionals to keep communication open with those trustees. Our Trustee Letter helps you offer support to trustees to ensure their policies are on track to accomplish the grantor’s estate planning goals.
Ready to help clients protect their legacy with trust-owned life insurance? Email us at TOLI@LFG.com or call us at 800-832-5372.
©2024 Lincoln National Corporation
Any tax information contained in this communication, while presented in good faith, is general in nature and is not intended to be a rendering of legal, accounting or tax advice and should not be used without the advice and guidance of a professional Tax Advisor. Furthermore, the information contained herein may not be applicable or suitable to an individual’s specific circumstances or needs and may require consideration of other matters.
Important information
This material is intended for informational and educational purposes only. It is not intended to be investment, legal, or tax advice. Work with your financial, legal and tax professionals for guidance.
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives and/or insurance agents do not provide tax, accounting or legal advice. Please consult an independent professional as to any tax, accounting or legal statements made herein.
Affiliates include broker-dealer/distributor Lincoln Financial Distributors, Inc., Radnor, PA, and insurance company affiliates The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY.
For financial professional use only. Not for use with the public.
LCN-6060122-103023
5/24 Z08
Order code: LIF-TOLID-IDE001
Talking with your clients about building a solid estate plan that includes trusts can sometimes be easier said than done. Knowing the right questions to ask can make all the difference. Let’s look at some specific scenarios that could impact your clients and ways to get a conversation started to come up with an estate plan.
John is interested in a strategy that can protect his life insurance proceeds from estate taxation. If he uses an ILIT as a tool, not only would his life insurance proceeds escape estate taxation, but since a trust is a set of instructions created by him, the trust can protect his heirs from claims of creditors and perhaps the spendthrift ways of one or more of his beneficiaries.
Bob likes all the benefits a trust ownership offers him, plus the ability to maintain limited access to the cash values through his spouse. By creating a spousal limited access trust with his wife Brenda as the trustee, his spouse will have limited access to the cash values during his life. Even with this flexibility, the trust assets enjoy estate tax protection.
Cathy is the beneficiary of her deceased spouse’s trust and defers the income because she does not need it. She is interested in a strategy that would enhance the net after-tax amount transferred to her heirs. If the trust allows — but does not require — the spouse to take income, perhaps having the trust obtain insurance on the surviving spouse would be advisable. If designed properly, this strategy could offer her a tax-free result.
Sam is interested in a strategy that would allow him to spread out his capital gains tax costs while also benefitting his favorite charity. Gifting appreciated assets to a charitable remainder trust may be attractive, as the tax cost can be spread and perhaps received in lower brackets. A tax deduction may also be obtained. Keep in mind at the end of the term or at time of death, the remaining assets in the trust transfer to the charity. A wealth replacement trust with life insurance rounds out this planning technique to make heirs’ distributions whole.
It’s important for the grantor to choose a trustee that will manage their trust successfully. And it’s important for financial professionals to keep communication open with those trustees. Our Trustee Letter helps you offer support to trustees to ensure their policies are on track to accomplish the grantor’s estate planning goals.
Ready to help clients protect their legacy with trust-owned life insurance? Email us at TOLI@LFG.com or call us at 800-832-5372.
Any tax information contained in this communication, while presented in good faith, is general in nature and is not intended to be a rendering of legal, accounting or tax advice and should not be used without the advice and guidance of a professional Tax Advisor. Furthermore, the information contained herein may not be applicable or suitable to an individual’s specific circumstances or needs and may require consideration of other matters.
Important information
This material is intended for informational and educational purposes only. It is not intended to be investment, legal, or tax advice. Work with your financial, legal and tax professionals for guidance.
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives and/or insurance agents do not provide tax, accounting or legal advice. Please consult an independent professional as to any tax, accounting or legal statements made herein.
Affiliates include broker-dealer/distributor Lincoln Financial Distributors, Inc., Radnor, PA, and insurance company affiliates The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY.
For financial professional use only. Not for use with the public.
©2024 Lincoln National Corporation
LCN-6060122-103023
5/24 Z08
Order code: LIF-TOLID-IDE001
Talking with your clients about building a solid estate plan that includes trusts can sometimes be easier said than done. Knowing the right questions to ask can make all the difference. Let’s look at some specific scenarios that could impact your clients and ways to get a conversation started to come up with an estate plan.
John is interested in a strategy that can protect his life insurance proceeds from estate taxation. If he uses an ILIT as a tool, not only would his life insurance proceeds escape estate taxation, but since a trust is a set of instructions created by him, the trust can protect his heirs from claims of creditors and perhaps the spendthrift ways of one or more of his beneficiaries.
Bob likes all the benefits a trust ownership offers him, plus the ability to maintain limited access to the cash values through his spouse. By creating a spousal limited access trust with his wife Brenda as the trustee, his spouse will have limited access to the cash values during his life. Even with this flexibility, the trust assets enjoy estate tax protection.
Cathy is the beneficiary of her deceased spouse’s trust and defers the income because she does not need it. She is interested in a strategy that would enhance the net after-tax amount transferred to her heirs. If the trust allows — but does not require — the spouse to take income, perhaps having the trust obtain insurance on the surviving spouse would be advisable. If designed properly, this strategy could offer her a tax-free result.
Sam is interested in a strategy that would allow him to spread out his capital gains tax costs while also benefitting his favorite charity. Gifting appreciated assets to a charitable remainder trust may be attractive, as the tax cost can be spread and perhaps received in lower brackets. A tax deduction may also be obtained. Keep in mind at the end of the term or at time of death, the remaining assets in the trust transfer to the charity. A wealth replacement trust with life insurance rounds out this planning technique to make heirs’ distributions whole.
It’s important for the grantor to choose a trustee that will manage their trust successfully. And it’s important for financial professionals to keep communication open with those trustees. Our Trustee Letter helps you offer support to trustees to ensure their policies are on track to accomplish the grantor’s estate planning goals.
Ready to help clients protect their legacy with trust-owned life insurance?
Email us at TOLI@LFG.com or call us at 800-832-5372.
©2024 Lincoln National Corporation
Any tax information contained in this communication, while presented in good faith, is general in nature and is not intended to be a rendering of legal, accounting or tax advice and should not be used without the advice and guidance of a professional Tax Advisor. Furthermore, the information contained herein may not be applicable or suitable to an individual’s specific circumstances or needs and may require consideration of other matters.
Important information
This material is intended for informational and educational purposes only. It is not intended to be investment, legal, or tax advice. Work with your financial, legal and tax professionals for guidance.
Lincoln Financial Group® affiliates, their distributors, and their respective employees, representatives and/or insurance agents do not provide tax, accounting or legal advice. Please consult an independent professional as to any tax, accounting or legal statements made herein.
Affiliates include broker-dealer/distributor Lincoln Financial Distributors, Inc., Radnor, PA, and insurance company affiliates The Lincoln National Life Insurance Company, Fort Wayne, IN, and Lincoln Life & Annuity Company of New York, Syracuse, NY.
LCN-6060122-103023
5/24 Z08
Order code: LIF-TOLID-IDE001
For financial professional use only. Not for use with the public.
