How to Fund a Trust With Life Insurance

Episode 11 of Estate Planning with Fexingo explores irrevocable life insurance trusts (ILITs). Lucas and Luna break down how an ILIT removes death benefits from your taxable estate, prevents estate tax on the payout, and keeps proceeds controlled by a trustee — not directly by beneficiaries. They walk through a concrete example: a $2 million policy inside an ILIT saves over $800,000 in federal estate tax versus owning the policy personally. The hosts also discuss the 'three-year rule' that traps people who transfer an existing policy into a trust, and the Crummey power notice that makes annual gifts to the trust qualify for the gift tax annual exclusion. A practical, numbers-driven episode for anyone with a life insurance policy who wants to keep more of the benefit in the family. #IrrevocableLifeInsuranceTrust #ILIT #LifeInsurance #EstatePlanning #EstateTax #Trust #CrummeyPower #ThreeYearRule #GiftTax #AnnualExclusion #DeathBenefit #WealthTransfer #TaxPlanning #Finance #FexingoBusiness #BusinessPodcast #Podcast #EstatePlanningWithFexingo Keep every episode free: buymeacoffee.com/fexingo