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TRUMP UNIVERSITY WEALTH BUILDING 101

Irrevocable Life Insurance Trust

If you have a great deal of life insurance, another type of trust to consider is an
Irrevocable Life Insurance Trust ( ILIT ). The ILIT is established as the owner of a
life insurance policy, so that estate taxes are avoided by putting the payout from
the life insurance policy into a trust rather than the decedent’s taxable estate.
If you have several small life insurance policies from forgotten sources
(your employer, your mortgage, private policies, through clubs or member-
ships in certain associations), it may be a good idea to put the larger one(s)
into an ILIT, because the smaller ones can quickly add up and could push you
over the estate tax exclusion. These types of trusts are complex and must
be done properly to avoid the estate tax issues. Seek the assistance of a

reputable professional or firm. If an ILIT is improperly established or main-
tained, the life insurance policy payout can be revoked or– worse and most
likely– included in the decedent’s estate, where it then becomes subject to
taxes if the size of the assets put your estate over the estate tax exclusion.

Gifting

Gifting is another frequently used method in estate planning. This involves

giving your heirs or beneficiaries annual gifts during your lifetime that thus
move assets out of your taxable estate before your death.
There are limits as to what you can give to each heir, each year, without
taxes, but if done properly, it can effectively move thousands of dollars
out of your taxable estate, and can also give you the joy of helping heirs with
gifts of cash or assets for major expenses such as financing college, buying

a home, and raising grandchildren. Once again, this gives us a way to help
others while helping ourselves. This is another win-win situation.
Remember, you need expert guidance to establish an estate plan. Laws
change frequently, and tools can be extremely complex. One misstep could
cost you more stress and expense than not having an estate plan at all. Estab-
lishing a lifelong relationship with estate planning professionals who can
guide and assist you with your plan is a must in your wealth-building “ To-Do ”
list. Properly planned and implemented, an estate plan can be one of the most
important gifts you give to your heirs.

Leave behind the Blueprints

As mentioned at the beginning of this chapter, you must answer six questions
before you start the estate planning process. ( Why do you need a formal

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