The US National Debt, High Taxes and the Great Recession Make the Irrevocable Life Insurance Trust (ILIT) an Important Retirement and Estate Planning Tool.
— Michael Pento
BOULDER, CO, UNITED STATES, November 20, 2022 /EINPresswire.com/ — For US taxpayers, an insurance limited liability investment trust (ILIT) is the best way to pool risk-free wealth (without exposure to losses in the stock market). ), tax-free growth, tax-free income, tax-free death benefit, tax-free wealth transfer and asset protection. ILIT consists of two main parts: (1) unchanging belief; and (2) life insurance held in trust. ILIT makes financial sense, even for the affluent, especially in the current and unstable economy.
Rising Public Debt and a Risky Stock Market
The US national debt is currently $31+ trillion and rising, and the federal government’s unpaid debt is estimated at nearly $100 trillion. Tax rates are currently very low, but they will rise significantly to pay off the government debt. The tax rate is currently “only 40%”. Of course, each person currently has a lifetime gift & tax deduction of $12+ million, but this is expected to drop to $6+ million in 2026. Most people’s savings are held as “qualifying funds” in IRAs or savings accounts. of a 401k, which may grow tax-deferred, but the money will be fully taxed if the money is distributed. When people pass wealth on to the next generation, it is often mismanaged, destroyed or thrown away by the children’s former spouses. Frivolous litigation is a constant threat to personal wealth and family businesses. And when large amounts of wealth are left to the next generation, they are subject to an estate tax.
The US stock market is overvalued and in need of a correction. “At the moment, the market is falling – it could be 30%, 50%, it could be 60%, 70% … until we find a real pivot and / or we find a low interest rate of 4%”, he warns. Financial manager Michael Pento.
Therefore, the problem includes a volatile stock market, high government debt, high taxes, and the risk of a poorly managed economy and litigation.
Answer: Irrevocable Life Insurance Trust, ILIT
– Tax-free growth
– Tax-free income
– Tax-free death benefit
– No housing or GST tax, forever
– Risk-free growth, no loss in the stock market (secured capital, 0% down)
– Benefit you, your spouse and descendants (according to your instructions)
– Maintain / continue family traditions, customs, businesses
– Protect family property (from taxes, divorce, lawsuits, frivolity)
– Provide financial security for you and your family
A universal life insurance policy (IUL) can provide good returns and eliminate market risk. Variable life insurance offers the opportunity to return to the market, but with the risk of a market downturn.
An IIT is managed by one or more trustees for the benefit of the beneficiaries. At the discretion of the trustees, the trustees may distribute tax-free income to beneficiaries (including the trust settlor (grantor)) through tax-free insurance loans. This is a tax-free income for the beneficiaries and the IIT does not have to repay the loan. Instead, the loans are paid from the death benefit upon the death of the insured. The death benefit (life insurance premium) is paid to the ILIT free of estate tax.
Depending on how the trust is created, the trustee’s share may be invested in a new life insurance policy each generation repeating the cycle, possibly for multiple generations.
Initial startup costs are usually between $5,000 and $20,000. The annual cost of monitoring and maintaining an ILIT is between 500 and 1500 dollars.
Thomas Swenson, JD
Law Office of Thomas J Swenson
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