Gifting strategies provide your clients a way to minimize future estate taxes, while helping to ensure their assets pass to the people and organizations that mean the most to them. Each individual can transfer a certain amount of assets during life or at death without paying either gift or estate taxes. With proper planning, even more assets can be removed from the estate by making annual gifts during lifetime.

There are three types of life insurance gifts:

• Gift of an existing policy
• Purchase of a new policy
• Naming a charity as a beneficiary of a new or existing policy

Key features:

• Income tax deductions may be itemized to claim an income tax charitable deduction in the year of the gift, provided the gift is made to a "qualified organization."
• The amount of an income tax charitable deduction is dependent upon the type of donee organization (e.g., public charity, private foundation, other), the value of the gift, and the type of property given.
• Donors who contribute property (other than cash and publicly-traded securities) to charity, and who claim a deduction exceeding $5,000, generally must obtain a written qualified appraisal from a qualified appraiser to support the claimed valuation.

Use with clients:

Key materials listed below. Additional information available in the Advanced Marketing Sales Library from Pentera Group, Inc.

• ILIT and gifting strategies guide (PDF)
• Charitable gift of a life insurance policy (PDF)
• Life insurance as alternative to a charitable bequest (PDF)
• Income tax charitable deduction (PDF)
• Supplementing retirement income with a charitable remainder trust (CRT) (PDF)
• Charitable remainder annuity trust vs. unitrust (PDF)
• Sample agreements to share with clients

For financial professionals:

• View Advanced Markets Information
• View life insurance products
• ILIT financing strategies comparison (single insured) (PDF)

An irrevocable life insurance trust (ILIT) is a trust used to remove the ownership and control of a life insurance policy from an estate. Life insurance can provide funds to help pay estate taxes and final expenses upon the death of an individual. The grantor gives up all rights in the property transferred to the trust and generally retains no rights to revoke, terminate, or modify the trust in any material way.

When such a trust holds a life insurance policy, usually on the life (lives) of the grantor and/or a spouse, it's an ILIT. If withdrawal powers are given to the beneficiaries, it may also be referred to as a "Crummey trust."

Key features:

ILITs are used to help accomplish some or all of the following objectives:

• Meet the liquidity needs of the grantor's estate.
• Provide for the income needs of survivors.
• Avoid estate taxation of the life insurance death proceeds.
• Shelter property in the trust from creditors at death.

Get started by reviewing the ILIT overview (PDF) for more details.

Use with clients:

• ILIT and gifting strategies guide (PDF)
• Estate planning fact finder (PDF) | Estate tax calc fact finder (DOTX)
• Considering ILIT changes (PDF)
• ILIT trustee checklist (PDF)
• Trust overviews:
  • Bypass (Credit Shelter) Trust (PDF)
  • Contingent ownership arrangement for survivorship insurance (PDF)
  • Crummey Power (PDF)
  • Inheritance equalization (PDF)
  • Grantor Retained Annuity Trust (PDF) | Sample proposal (PDF) | Request for proposal (DOC)
  • Private Switch Dollar (PDF)
  • Marital deduction and the QTIP Trust (PDF)
  • Special need flyer (PDF) | Approach email (OFT) | Workshop presentation (PPT) | Workshop invite (OFT)
• Sample agreements to share with clients

For financial professionals:

• View Advanced Markets Information
• View life insurance products
• ILIT financing strategies comparison (single insured) (PDF)

It’s easy to help your clients know where they stand by estimating their estate tax exposure. Estate tax reports help to show possible scenarios and the potential tax outcomes for better comprehension. They also allow for more informed decision-making as you help them through the legacy and estate planning process.

Use with clients:

• Estate tax exposure:
  • Sample single output (PDF)
  • Sample married output (PDF)
• Estate tax analysis:
  • Sample output (PDF)

For financial professionals:

• Request for proposal – estate tax exposure (DOTX)
• Request for proposal – estate tax analysis (PDF)