Many people know that properly structured life insurance is an excellent asset for purposes of:
- Premature death “income replacement”;
- Tax-deferred income tax growth;
- Tax efficient cash flow in retirement years;
- Debt risk management (i.e., payoff mortgage and business debt);
- Investment diversification;
- Family inheritance creation; and
- Payment of death/estate taxes, debt and other final expenses.
Many do not know that in most family situations, properly designed life insurance also provides excellent creditor and asset protection under current Illinois law.
Additionally, Illinois law provides that such life insurance proceeds and associated cash values are exempt from attachment to (1) the insured’s creditors, (2) the insured’s wife or husband’s creditors, and (3) creditors of a child, parent or other person, each of whom are dependent upon the insured, in all cases except fraudulent transfers.
Illinois law protects life insurance proceeds and the aggregate net cash value of any life insurance policy that is payable to and received by (1) a wife or husband of the insured, (2) a child, parent or other person, each of whom are dependent on the insured, and (3) certain revocable or irrevocable trusts that name the wife or husband of the insured, or a child, parent or other person, each of whom are dependent upon the insured, as the primary beneficiary, from the creditors of such party.
Generally, Illinois law does not limit the amount of life insurance proceeds or cash value that can be protected. Properly designed and structured life insurance can be an incredible asset for high-risk professionals such as executives, physicians, business owners, attorneys, and others desiring asset and creditor protection.
Due to the asset protection and other unique qualities of properly designed and structured life insurance, most clients, especially clients in high-risk professions and businesses, should consider increasing their life insurance holdings or adding life insurance to diversify their assets for purposes of better legal, tax, financial and risk management planning.
To make sure you are getting the most out of your life insurance planning, call us at 847-382-9130 or email us at firstname.lastname@example.org to speak with one of our attorneys. We also appreciate your referrals.