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Tables of Contents for An Estate Planner's Guide to Life Insurance
Chapter/Section Title
Page #
Page Count
About the Author
vii
 
Preface and Acknowledgements
viii
 
Introduction
1
16
The Role of Life Insurance in Estate Planning
1
3
In General
1
1
Replacement of Income
1
2
Providing Liquidity
3
1
Business Uses
4
1
Conclusion
4
1
Terminology
4
3
Basic Terms
4
1
Riders
5
1
Dividends
6
1
Types of Policies
7
3
Term Life Insurance
7
1
Whole Life Insurance
8
1
Endowment Contracts
8
1
Universal Life Insurance
8
1
Variable Life Insurance
9
1
Survivorship Insurance
9
1
Employer-Provided Insurance
10
6
Group-Term Insurance
10
1
Split-Dollar Insurance Arrangements
10
4
Retirement Plans
14
2
Information Needed for Planning
16
1
Essential Facts
16
1
Obtaining Information; Beneficiary Designations
16
1
Income Taxation
17
10
Exclusion from Gross Income; Transfer-for-Value Rule
17
4
Cash Values
21
1
Increase in Cash Values; Dividends
21
1
Withdrawals
21
1
Definition of Life Insurance
22
1
Special Rules on Exchanges, Premium Payments, and Interest on Policy Loans
23
4
Exchanges of Life Insurance Policies
23
1
Nondeductible Premium Payments
24
1
Premiums Included in Income of Employee
24
1
Interest on Policy Loans
25
2
Transfer Taxation
27
7
Valuation for Gift and Estate Tax Purposes
27
3
Gifts of Life Insurance Policies, Premiums, or Proceeds
27
1
Valuation of Permanent Life Insurance Policies
27
1
Transfer Tax Valuation of Term Insurance Policies
28
1
Split-Dollar Insurance
29
1
Policy Loans
29
1
Includability of Proceeds in the Insured's Gross Estate
30
4
General Rule
30
1
Transfers Within Three Years of Death
31
3
The Irrevocable Life Insurance Trust
34
25
Planning Considerations
34
3
Smaller Estates
34
1
Planning When One Spouse Has Most of the Wealth
34
1
Larger Estates
35
2
Irrevocable Trust as Owner
37
1
Qualifying for the Annual Exclusion
37
9
In General
38
1
Outright Transfer v. Transfers to an Irrevocable Trust
38
1
Qualifying for the Annual Exclusion
38
1
Designing the Crummey Power
39
1
Definition of Amount Subject to Withdrawal
40
1
Limitation on the Spouse's Right to Withdraw
40
1
Survivorship Insurance
41
1
Premium Payments by Third Parties
41
1
Other Assets in the Trust
41
1
Notifying the Trustee
42
1
Notifying the Beneficiaries
43
1
Restrictions on Rights to Withdraw a Particular Donation
43
1
Reasonable Period
44
1
Naked Powers
45
1
Effect of Other Rights to the Trust Assets
46
1
Gift Tax Consequences to Beneficiaries
46
3
Income Tax Consequences to Beneficiaries
49
2
Beneficiary Treated as Owner of Trust Assets
49
1
After Original Grantor Dies
50
1
Estate Tax Consequences to Beneficiaries
51
1
Avoiding Inclusion in Gross Estate of a Beneficiary
51
1
Trustee's Powers
51
1
Generation-Skipping Transfer Tax Consequences
52
5
In General
52
1
GST Annual Exclusion Before TAMRA
53
1
Post-TAMRA GST Annual Exclusion Rules
53
1
Allocation of GST Exemption
54
3
Drafting Considerations
57
1
Designing the Agreement
57
1
Using Proceeds to Pay Estate Taxes
58
1
Creating Flexibility
58
1
Conclusion
58
1
Sample Forms
59
22
Introduction
59
1
Form: Irrevocable Life Insurance Trust Agreement Designed to Hold Policies on the Life of the Grantor
60
10
Form: Irrevocable Life Insurance Trust Agreement Designed to Hold a Last-To-Die Policy on the Life of the Grantor and His or Her Spouse
70
6
Form: Cover Letter to Client Explaining Use of Irrevocable Life Insurance Trust
76
3
Form: Letter Notifying Trustee of Donation
79
1
Form: Letter Notifying Beneficiary of Right of Withdrawal
80
1
Index
81