Irrevocable Trusts, “ILIT” – short for Irrevocable Life Insurance Trust – are created to own life insurance policies. The significant advantage of having insurance policies owned inside an ILIT is that the death proceeds are not included in the insured’s taxable estate upon his death. Further, the death proceeds are not taxable in the surviving spouse’s estate, even though she has access to the proceeds to maintain her lifestyle. Upon the death of the surviving spouse, the proceeds pass tax free to the children or beneficiaries of the insured’s choice. Consider this example: Dad and Mom have a taxable estate. They need life insurance in the event Dad prematurely dies. He purchases a $2 million policy. Upon the second death of Dad and Mom, if Dad owns the policy the children may receive only $800,000 because of 40% federal estate taxes. If Dad’s Irrevocable Trust is the owner and beneficiary of the policy, upon his death the proceeds are available for Mom, but yet at Mom’s death if she has not used the funds, pass to the children estate tax free. Sometimes ILIT’S are drafted to own insurance on both spouses so that the insurance pays off at the second death when estate tax is owed. These so-called “second to die policies” or “survivorship policies” are almost always owned by ILIT’S because there is an existing estate tax problem, and you do not want to add to the estate tax problem with the death proceeds. With 2019 federal estate tax exemption amounts of $22.8 million for a married couple, not many taxpayers are concerned with estate tax. But for those exceeding $22.8 million, irrevocable insurance trusts are still a necessity. ILIT’S may again become more relevant if a future President and Congress reduce the estate exemption amount.
Cameron/McEvoy congratulates John Dedon for selection in Washingtonian’s “Top Financial Advisors Hall of Fame.” (February 2023.) John joins a few area lawyers who, for over a decade and year after year, have been named by Washingtonian as one of the top estate lawyers in the region. Since its inception in 2009, Washingtonian has asked hundreds… Read »
Coming up in December, John Dedon will be recognized in two prominent local publications. Washingtonian Magazine again names John as a 2023 Top Lawyer in the Trust and Estates category. Washingtonian Magazine chooses Top Lawyers by surveying local lawyers asking them whom they would trust if they needed legal counsel themselves. Northern Virginia Magazine also… Read »
In the March 2022 publication, John Dedon was again chosen by his peers and Washingtonian Magazine as one of the “Top Financial Advisors,” in the Estate Attorney section, for Virginia, Maryland and the District. John has been selected consistently for over a decade, and is routinely named as well for Washingtonian’s “Top Lawyers.”
In the December 2020 issue, John Dedon is again recognized by Washingtonian Magazine as a Top Trusts and Estates Attorney. Washingtonian Magazine chooses Best Lawyers by surveying nearly 1,000 attorneys recognized on a prior year’s list, asking whom they consider best among their peers. Coming up in the January 2021 issue, John will also again… Read »
I was recently interviewed regarding fundamental estate planning needs and the appropriate tools to accomplish your objectives. Below is the link to the interview: https://www.youtube.com/watch?v=pPP6wiPj6H0
For Our First Meeting
About Revocable Trusts
John P. Dedon
John P. Dedon is a tax lawyer with a talent for explaining the complexities of tax law in lay terms. Working in the estate planning, asset protection and business areas for more than 35 years, John helps clients preserve assets and plan for the future with traditional planning tools, including Trusts (dynasty trusts, intentionally defective trusts, grantor retained annuity trusts), LLC and partnership entities, and cutting-edge concepts such as cryonic preservation trusts.
Fellow of the American College of Trust and Estate Counsel (ACTEC)
“Hall of Fame” Washingtonian magazine Top Wealth/Financial Advisor
Martindale-Hubbell AV Rating/Top Rated Estate and Taxation Lawyer
Consecutive years named Washingtonian Best Lawyers; Best Lawyers in America® for Trusts and Estates; Top Lawyer and Top Financial Professional by Northern Virginia Magazine; Legal Elite by Virginia Business magazine