ITS Brings Simplicity to ILIT Administration Services for Matters Across the U.S.
The Irrevocable Trust Life Insurance Market
Insurance Trust Services, LLC (ITS) is a nationwide provider of irrevocable life insurance trust (ILIT) administration services.
The irrevocable life insurance trust (ILIT) market is substantial. Approximately 60 percent of Americans own a life insurance policy, and more than 10 percent of American households have over $500,000 in investable assets.
“We estimate that more than 3 million life insurance policies require administration services in the United States.”
Despite its scope, the ILIT market remains highly fragmented, making the ILIT administration function tedious and critical. While many advisors offer ILIT administration services as a “loss leader” for their practices, at ITS, it is the core of what we do. As a result, while other advisors may focus the majority of their time and attention elsewhere, we prioritize providing sound, efficient, and cost-effective ILIT administration services to our clients.
Core Services
Our primary ILIT administration services include:
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Contribution Letters
Our team manages all correspondence with the trust via contribution letters. We contact the grantor of the trust to let them know that the premium is due and that funds must be deposited into the trust accounts.
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Premium Due Date Reminders
Failure to make a timely premium payment could result in a reduction of the death benefit, the policy guarantees or lapse of an insurance policy.
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Premium Collections And Disbursements
The ITS team can manage the collection and disbursement of premiums for trusts as part of our services. We create segregated non-interest bearing accounts to collect and disburse premiums for our clients.
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Crummey Notices / Withdrawal Notices
On behalf of our clients, ITS drafts and distributes Crummey letters. Crummey letters, also known as withdrawal letters, are sent to the beneficiaries of a trust to notify them that the trust has received a donation and that they have the right to withdraw property from the trust immediately. In many cases, the letter specifies a deadline by which the beneficiary must withdraw a contribution. A Crummey letter gives the recipient the option of receiving the donation in the form of a gift right away—rather than having to wait until later.
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Timely Trustee Reporting
The Trustee is responsible for preparing annual accounts and reports for the beneficiaries of the Trust. On behalf of the Trustee, ITS ensures that reporting is completed on time and accurately. Our team handles collections and payments, as well as enforce ledgers and submit reminders of premium due dates.
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Manage Interaction
The ITS team is in charge of keeping trustees and advisers informed. We provide reporting and analysis to advisors and trustees. ITS also assists with any insurance policy changes that are required.
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Fiduciary Accountings And Accounting Waivers
At ITS we make sure our clients are aware of their fiduciary obligations and responsibilities. We can also generate waivers to satisfy fiduciary reporting requirements.
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Documentation Of Policy Changes, Reductions, And Policy Surrender
It’s challenging to keep up with changes in a policy’s fine print. Any time a policy is changed, our team will communicate those changes to trustees. These changes may include a 1035 exchange, an increase or decrease in death benefits, an exchange policy, or a change in policy type. Our team will take care of the documentation associated with policy changes, policy reductions, and policy surrender.
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Attorney Review & Analysis
We have attorneys available at our client’s disposal. An attorney from ITS will also review and comment on the Crummey provisions (withdrawal rights) in each trust.
Additional ILIT Administration Services
In addition to our core services, we provide additional ILIT administration services in three core areas.
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Pre-Acceptance Review
We review policies and trusts to identify potential performance issues and trustee liability concerns, and we provide comprehensive reports outlining our conclusions.
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Remediation
We assist trustees with the difficult task of balancing their risk management obligations and administrative costs with limited ILIT revenue. We offer customized solutions for problematic policies and provide cost-effective remediation assessments and recommendations.
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Replacement Analysis
We evaluate proposed changes to life insurance policies, compare existing policies to proposed replacements, and manage all necessary notices and consents.
Contact Us To Learn More
Regardless of your specific needs, we can provide a custom-tailored solution to meet them. With well over a decade of experience serving the ILIT market, we are well-attuned to the risks and challenges that trustees and others face on a day-to-day basis. By working with ITS, you can feel confident knowing that you are making the right decisions and doing what is necessary at the right time. With our help, you can mitigate your risk of facing civil liability due to improper ILIT administration.
If you would like to learn more about ITS or the services we offer, we encourage you to get in touch. To speak with an experienced member of our team in confidence, please contact us online today.