The Washington Report: – Wealth Transfer Edition
“The shrinking market for stand-alone long-term care (LTC) insurance has increased the popularity of pairing life insurance with a qualified LTC (“QLTC”) benefits rider, which can provide more comprehensive coverage to the insured often for a lower premium. But placing these “hybrid” policies into an irrevocable life insurance trust (“ILIT”) requires juggling competing goals: keeping death benefits outside of the insured’s estate while also managing the insured’s LTC funding concerns. For successful ILIT planning with hybrid policies, additional steps are required to preserve LTC planning goals while also maintaining the ILIT’s intended estate tax planning benefits.”
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