"My Biggest Business Regret?" Not Using an ILIT (Before It's Too Late) - Palma Financial

Imagine safeguarding your wealth from legal risks while maximizing your loved one’s inheritance. An Irrevocable Life Insurance Trust (ILIT) could be your answer, offering asset protection and a unique tax-saving opportunity for business owners like you. Let’s explore how this powerful tool empowers and protects your legacy.

What is an ILIT?
An ILIT holds and protects life insurance policies, shielding them from creditors and lawsuits. It offers crucial security for business owners facing potential litigation.

When is an ILIT Right for You?
Timing is essential. Establishing an ILIT when your business is stable optimizes its effectiveness. Early planning ensures it serves its purpose smoothly, avoiding potential issues with creditors. Especially now, with potential estate tax changes in 2026, proactive planning with an ILIT may be even more crucial.

Why Consider an ILIT?

  • Powerful Asset Protection: Shield your life insurance from creditors, especially valuable for those in high-risk businesses.
  • Enhanced Estate Efficiency: Reduce estate taxes by removing the policy, leaving more for your heirs.
  • Control & Flexibility: Set specific terms for distributing the trust’s proceeds, ensuring your wishes are met.
  • Leverage Gift Tax Advantage: This is where ILITs truly shine. By contributing to the trust over time using the annual gift tax exclusion (currently $18,000 per recipient in 2024), you can significantly reduce the taxable value of your estate while funding the life insurance policy to benefit your loved ones in the future. This “double benefit” allows you to transfer wealth efficiently and strategically.


Key Considerations:

  • Irrevocable Choice: Carefully plan and seek professional guidance due to its permanence.
  • Seek Expert Advice: The complexity of ILITS demands professional input to align with your goals and maximize the gift tax advantage.

Don’t Wait: Secure Your Future and Leverage Tax Advantages With potential estate tax changes on the horizon and the powerful gift tax benefits offered by ILITS, now is the time to explore your options.
Schedule a consultation today to discuss how an ILIT can protect your legacy and maximize your family’s inheritance.

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