Funding Irrevocable Life Insurance Trust (Married Individual with Trust for Spouse and Children) (Client Memorandum)

This legal template is designed to provide guidance and instructions to a married individual who seeks to set up an Irrevocable Life Insurance Trust (ILIT) with specific provisions for their spouse and children. The template consists of a client memorandum, which is a written communication from an attorney or legal professional to the client, providing an overview of the process and considerations involved in funding the ILIT.

The memorandum may begin by detailing the purpose of an ILIT, which is to ensure the financial security of the spouse and children after the individual's death by utilizing life insurance policies. It will then explain the various steps required to fund the trust, including the transfer of ownership of existing life insurance policies or the acquisition of new policies under the trust's name.

The template is likely to outline the requirements for creating an ILIT, which may involve drafting a trust agreement, appointing a trustee, and designating beneficiaries. It will also cover the different legal and tax implications involved, such as the need to analyze gift tax exemptions and the potential benefits of establishing an ILIT in terms of estate tax planning.

Furthermore, the memorandum might address specific provisions for the spouse and children, such as guidelines for accessing the trust's assets, setting up educational or medical support for the children, or providing for the spouse's maintenance. It may highlight the importance of periodic reviews and updates to ensure the ILIT remains aligned with the client's evolving needs and objectives.

Throughout the document, the template is expected to provide practical advice, relevant legal references, and suggestions to maximize the benefits and protections offered by an ILIT. However, the specific details and language used in the template can vary, as they should be tailored to the unique circumstances and preferences of the client.