Thoughtfully handling all matters related to your wealth


"It requires a great deal of boldness and a great deal of caution to make a great fortune; and when you have got it, it requires ten times as much wit to keep it."
Nathan Mayer Rothschild

Keeping the great fortune that you've amassed for the benefit of your loved ones and your other aspirations requires not only doing the right things but doing things right. You have made the wise investment in planning your estate and executing your estate arrangements with the professional guidance that only an estate attorney can provide. Your estate plan calls for the establishment of an irrevocable life insurance trust (ILIT) as an essential part of your wealth preservation strategy for passing your great fortune to the next generation. Clearly, your fortunehowever you define itand your formal estate arrangements are evidence of doing the right things as they pertain to your wealth.

Irrevocable life insurance trusts require the ongoing maintenance and oversight of a trustee. Essential duties may include performing time-sensitive tasks such as distributing annual Crummey notices to the beneficiaries and paying premiums to support the life insurance policy held by the trust. For ILITs that are initially being set up, insurance must be selected and placed in force. For existing ILITs, many of which may have been in place for years, ongoing review of the policy's adequacy, appropriateness and ongoing viability should probably be performed on a regular basis. While this a simplification of the trustee's responsibilities, it is critical to note that any trusteeprofessional or otherwiseis held to a fiduciary standard and can be personally liable for a lapse in responsibility, whether intended or not.

It is our contention that many ILITs with nonprofessional trustees (friends, family members and other associates) are grossly mishandled; most nonprofessional trustees simply lack the qualifications, time and focus to arise to the level of trustee. The consequences can be serious and may range from the trustee being held liable for the purchase of the insurance asset if they are the purchaser, to being held liable should the death proceeds get pulled back into the taxable estate as a result of improperly handled Crummey administration. What perplexes us is why so many estate attorneys seem to be indifferent to these issues once the trust documents have been executed. After all, serious lapses, whether identified by angry beneficiaries or through an estate audit by a tax-hungry IRS, can lead to the unraveling of the plans you put in place and perhaps lead, sadly, to family discord.

Have you done things right in regard to your irrevocable life insurance trust? If you are considering or currently using a nonprofessional trustee, we respectfully would like to point out that you may be leaving an important part of your estate plan and wealth preservation strategy to chance.

We at enCompass Wealth Management, LLC, in conjunction with The Professional Trustee, Attorneys at Law, are pleased to be able to help you address what we consider to be both a most overlooked and critical wealth management issue. Our two organizations are committed to working with you and your most trusted professionals to ensure the proper handling of your ILIT so that it efficiently and effectively fulfills its intended purposeand as fiduciaries, we will put your best interests first and foremost.

Through our two respective organizations, we will perform separate and distinct responsibilities. We are positioned to offer well-coordinated turn-key services to support your ILIT. If you are satisfied that your current nonprofessional trustee is properly handling the ILIT administration, insurance services are available on a stand-alone basis through enCompass Wealth Management, LLC. Our primary responsibilities are as follows:

The Professional Trustee, Attorneys at Law

  • Initial setup to include reviewing your trust documents, determining key directives and establishing ongoing notification procedures.
  • During the life of the insured, handling Crummey letters, paying premiums, notifying enCompass Wealth Management, LLC, or your other insurance professional of the need for an insurance policy audit and review, making adjustments if required by law or change in circumstance in coordination with your estate attorney, and paying necessary trust expenses and any applicable taxes.
  • After death, submitting the death claim and collecting death proceeds, and making sure that the management and distribution of the funds are in accordance with the trust documents.

enCompass Wealth Management, LLC

  • Providing insurance services under a fully transparent basis (we will disclose our compensation, conflicts of interest, risks and product alternatives and design).
  • Conducting insurance policy audits, reviewing policy adequacy and appropriateness given potentially changing needs and circumstances, and evaluating policy competitiveness.

For a complimentary meeting, please contact enCompass.

This website is not meant to offer legal advice. Reading or responding to this website does not create an attorney-client relationship with the reader. The two companies mentionedenCompass Wealth Management, LLC, and Felix Group, PC, d/b/a The Professional Trustee, Attorneys at Laware separate entities, not partners, and do not share fees or otherwise have a joint venture relationship under the law.

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