What does it mean to be a successor trustee?

A Successor Trustee is the person responsible for administering the trust after its Grantor either passes away or becomes “Incapacitated” – that is, unable to administer the trust for themselves.

What is the difference between a successor trustee and a trustee?

A trustee is an individual or company that serves a managerial function in connection with some type of property. A successor trustee is a new trustee who replaces a previous trustee, while a co-trustee is a trustee that serves at the same time as another trustee. …

Who is the fiduciary of an Ilit Trust?

An ILIT is an Irrevocable Life Insurance Trust, created primarily to own life insurance, and sometimes other assets. The trustee of an ILIT is the fiduciary of the trust assets. The trustee can be a family member (who is not the creator or ‘grantor’ of the trust), or an independent trustee at a bank, for example.

What are the duties of a successor trustee?

Being named successor trustee is not an honor, it is a job. It is a job that comes with great responsibility. We’ve compiled a basic list of the duties of a successor trustee to show you the obligations you might be leaving to a friend or family member and to highlight what a corporate trustee can do for you. 1.

Who is the trustee of a life insurance trust?

Do you have to file tax return for Ilit?

If the ILIT is not a “Grantor Trust”, then the income and deductions must be reported on the trust tax return (Form 1041). Tax reporting is required, as well, when an ILIT is designated as beneficiary of assets scheduled to pour into it from another trust. See John N Thomson, v.

Who are the beneficiaries of an Ilit Trust?

Who Are the Beneficiaries of an ILIT? The ILIT is normally designated as the insurance policy’s primary beneficiary. Death benefits are deposited into the ILIT when you die and they’re held in trust for the benefit of the individuals you’ve named in your trust documents to receive the money.

What to do if a trust does not appoint a successor?

If the trust does not appoint a successor trustee, you must follow the requirements outlined in the trust for vacancies in the role of trustee, or petition the court for guidance. Accepting an appointment as trustee to step in as successor trustee of a trust, it is important to have legal guidance at your disposal.

How does an Ilit help you avoid estate taxes?

An ILIT can help you avoid estate taxes. Many people aren’t aware that for tax purposes, their estates might include the proceeds from their life insurance policies when they die. Depending on the value of the policy, this could invite an estate tax bill.

Can you cancel an irrevocable life insurance trust ( Ilit )?

You normally cannot undo an irrevocable trust after you’ve set it up. But because ongoing premiums must be paid to keep the life insurance policy in effect, all you’d have to do to cancel the trust is stop making payments for the premiums. The trust would then become an empty vessel when the policy lapses. What Is an ILIT?