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What good is an Irrevocable Life Insurance Trust for me in New Jersey?

Posted on Fri Aug 14, 2015, on Revocable Trusts and Living Trusts

From our “Ask a Question” Mailbag: New Jersey Irrevocable Life Insurance Trust

Most Recently Updated July 19, 2018. 

“My estate is worth about $4,000,000, which includes a $1,000,000 life insurance policy. At my death, my estate passes to my two children. Now that the Federal Estate Tax Exemption is at $5,000,000.00, what good is an Irrevocable Life Insurance Trust for me?”

How Do I Start My Estate Planning

New Jersey Irrevocable Life Insurance Trust

New Jersey Irrevocable Life Insurance Trust

In rough terms, as long as your estate stays under $5,000,000.00 (adjusted for inflation) at your death your estate will not owe any Federal Estate Tax. 

But you are a resident of Camden County, New Jersey, so you are forgetting about the New Jersey Inheritance Tax and the New Jersey Estate Tax. If your assets pass to your children, the New Jersey Inheritance Tax will be zero, but the New Jersey Estate Tax taxes all assets over $675,000.00. This will include the $1,000,000 life insurance policy. Your family will likely recognize a substantial savings if you form an Irrevocable Life Insurance Trust to avoid the New Jersey Estate Tax.

More Planning Questions?

The irrevocable life insurance trust is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: New Jersey Irrevocable Life Insurance Trust

I hope that this article was helpful in explaining the irrevocable life insurance trust. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

Wills, Trusts, Probate, and Estate Litigation, It’s All We Do!

 

 

Tags:

Camden County, Death taxes, Estate Planning, Estate Planning Attorney, Estate Planning Lawyer, Estate Tax, Irrevocable Life Insurance Trust, Irrevocable Trust, Life Insurance, New Jersey

Peter KlenkPeter Klenk

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    Peter Klenk is the founding member of Klenk Law, a seven attorney boutique estate planning law firm. We serve clients in Pennsylvania, New Jersey, New York, Minnesota and Florida. Peter Klenk received his Masters in Taxation LL.M. from NYU Law School and his J.D. from the University of Minnesota Law School. He served his country in the Navy JAGC during Desert Storm. Easy to talk to, feel free to call Peter for an appointment. We will make the process as easy as possible!

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