The Opportunity:
The applicable exclusion amount can be a very powerful tool maximizing wealth transfer. A widow or widower who is a beneficiary of a properly structured Credit Shelter Trust and doesn’t need the trust’s income or principal to maintain his or her standard of living may benefit by having the trust purchase life insurance.
Using the trust’s assets to purchase life insurance on his or her life should provide a gift tax-free strategy of transferring maximum wealth.
This strategy offers:
- Income Tax-Deferral
- a gift-free strategy of paying insurance premiums
- an estate and income tax-free death benefit
- leveraging of the applicable exclusion amount
- the possibility of maximizing wealth transfer to Credit Shelter Trust beneficiaries