It is becoming increasingly common for people in the state of Massachusetts to purchase life insurance since they offer a way to give families peace of mind. They may choose such packages so that they are confident that they can give their children the support they need no matter the circumstances.
However, life insurance can be problematic for the purposes of estate planning. One way to avoid complications is to have life insurance controlled within your estate plan. You can do this by choosing to start an irrevocable life insurance trust.
Understanding the nature of irrevocable life insurance trusts (ILITs)
An ILIT is a way for you to have your life insurance policy owned by another entity. By doing this, it will no longer be a part of your estate and it will, therefore, not go through the process of probate.
However, it is important to note that once you have created an ILIT, it cannot be undone, and you will never be able to have it in your name again.
You can determine different aspects of the ILIT when you are setting the terms, and this is one of the advantages. You will be able to name the trustee, who will have the task of managing the ILIT on your behalf. You will also be able to name the beneficiaries and what they will be set to receive from the ILIT at the end of your life.
If you have a life insurance policy and you want to learn more about the benefits of setting up an ILIT in the state of Massachusetts, an attorney can help.