What is the difference between licensing and registration?

Licensing is permission to perform a regulated activity (like selling insurance or acting in a brokerage capacity). Registration is being listed with a regulator for oversight and a public record. Credentials can be useful, but they are not the same as licensing or registration. If unsure, ask the professional to state their role and the regulator that oversees it.

How can I check if someone is registered as an investment adviser?

Use the SEC’s Investment Adviser Public Disclosure (IAPD) website to search for the person and firm and review their status and filings.

How can I check a broker or brokerage firm’s background?

Use FINRA BrokerCheck to review a broker or firm’s profile, employment history, and disclosures (if any).

What is Form CRS and why should I read it?

Form CRS is a short relationship summary to help consumers understand services, fees, and conflicts, and compare firms. If evaluating investment advice, ask for Form CRS and read it before agreeing to services.

What is Form ADV and what does it tell me?

Form ADV is part of the disclosure system for investment advisers. It describes the adviser’s business, services, conflicts, and other required information. If someone is acting as an investment adviser, ask where you can read their Form ADV.

What does a disclosure mean in BrokerCheck or IAPD?

A disclosure is reportable history (for example, regulatory actions or customer disputes) depending on the role. It is not automatically disqualifying, but it is a signal to read carefully, understand severity and timing, and look for patterns.

Is financial advisor a regulated title?

“Financial advisor” is often a general marketing title. What matters is the person’s actual role (insurance agent, broker, investment adviser representative, or multiple). Ask what they are licensed or registered to do and which regulator oversees those activities.

What does fiduciary mean, and when does it apply?

“Fiduciary” generally refers to a duty to act in a client’s best interest within the scope of the relationship. Whether and when it applies depends on the role and engagement. Ask for the standard of care that applies to your relationship and the specific recommendation, in writing if possible.

What are red flags that should make me slow down?

Common pause-and-verify red flags include pressure to act quickly, refusal to provide key documents, guarantees implied where outcomes depend on assumptions, and replacing something you own without a written side-by-side comparison and rationale.

If I’m considering replacing a policy, what should I request?

Request a side-by-side comparison of the old and new policy, a written rationale, any surrender charges or penalties, and any new underwriting requirements or time-based limitations. Then take time to review before signing.

Irrevocable Life Insurance Trusts in Spring, TX

An irrevocable life insurance trust (ILIT) can own a life insurance policy so ownership, control, and beneficiary terms align with a broader estate plan. This Spring, TX consumer guide explains how ILITs work, what trustees are responsible for, how policies are typically set up or transferred into a trust, and what to discuss with an attorney and tax professional before you move forward.

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An irrevocable life insurance trust (often called an ILIT) is a legal trust that can own a life insurance policy. “Irrevocable” means it is generally not designed to be changed casually once it is set up, so the details need to be reviewed carefully on the front end.

People consider an ILIT when they want life insurance ownership to line up with a broader estate plan. It can help clarify who controls the policy, how beneficiaries are named, and how proceeds are managed and distributed after a death.

For households in Spring, TX and nearby areas, the process is typically coordinated with Texas counsel and a tax professional. The paperwork matters, and so does the follow-through.

This page is an educational overview of how ILITs work, what to ask before you create one, and where people often get stuck.

It is general information only.
It is not legal, tax, or individualized financial advice.

ILIT Basics for Spring, TX Households

At a high level, an ILIT is a trust that can own a life insurance policy and spell out how the death benefit should be handled and distributed. The trust, not the insured individual, is the owner. That separation is the point. It can help coordinate life insurance with an estate plan, add structure around beneficiaries, and reduce confusion about who has authority to make changes to the policy.

An ILIT is not a shortcut or a form you download and fill out. It is a legal structure with real responsibilities, and it needs to be drafted and reviewed with qualified counsel. It also does not replace tax planning. If an ILIT is appropriate, the structure is typically coordinated with an attorney and a tax professional so ownership, funding, and documentation align.

You will most often see ILITs discussed alongside:

larger life insurance policies
estate planning conversations
family or business planning where clarity and control matter

Trust

A legal arrangement that holds assets under written terms

Beneficiary

The person(s) who may receive trust benefits

Trustee

The person or institution that administers the trust

Crummey notice

A notice sometimes used when gifts fund premiums

Grantor/Settlor

The person who creates the trust

When Families Typically Consider an ILIT

Most people do not start with “I need an ILIT.” It usually comes up after someone is trying to solve a bigger planning question and realizes that policy ownership and beneficiary controls matter as much as the coverage itself.

Common situations where families ask about ILITs include:

Estate planning coordination: aligning life insurance with wills, trusts, and other planning documents.
Minor beneficiaries or spendthrift concerns: adding structure for how proceeds are managed if a beneficiary is young or needs guardrails.
Second marriage or blended family planning: creating clearer rules for who benefits and when, especially when goals need to balance different households.
Business continuity planning: supporting a buy-sell arrangement or key-person planning when ownership and proceeds need to follow a written plan.

An ILIT is not a one-size-fits-all answer. Whether it fits depends on the facts, the size and purpose of the policy, and how it interacts with the rest of the estate plan. That is why ILIT decisions are typically guided by an estate planning attorney and reviewed with tax professionals.

Key Roles and Responsibilities

Who Owns What (and Why It Matters)

With an ILIT, the trust is typically set up to own the policy and often to receive the death benefit, rather than having the policy owned by an individual. That changes who has control. The policy owner can usually make updates like changing beneficiaries, adjusting certain policy features, or requesting policy transactions that are permitted under the contract. In an ILIT structure, those decisions are generally handled through the trustee under the trust’s written terms.

Trustee Duties People Often Overlook

The trustee role is not just a title. Trustees are often responsible for practical follow-through, such as:

keeping records and notices organized
handling premium payments and tracking contributions
following the trust’s rules for distributions and timing
coordinating with professionals when updates or questions come up

A common mistake is choosing a trustee without thinking about workload, reliability, and comfort with paperwork. The best trustee is usually someone who can consistently handle the details, not just someone with good intentions.

How an ILIT Is Typically Set Up

An ILIT is usually set up as part of a coordinated planning process. The exact steps vary, but most situations follow a familiar sequence:

An estate planning attorney drafts the trust and confirms the intended terms, beneficiaries, and trustee provisions.
A trustee is appointed, and basic administrative items are handled, such as opening an account if the trust will receive and pay funds.
The policy is set up under the right ownership, either by applying for a new policy with the trust as owner, or by evaluating whether an existing policy should be moved into the trust.
Beneficiary designations are confirmed so they match the structure and the broader estate plan.
A funding and premium payment process is established, including how contributions are documented and how payments will be made over time.

In practice, this often involves more than one professional. The attorney handles the legal structure, a CPA may review tax implications and documentation, and the insurance professional supports policy implementation and ongoing service.

New Policy vs Transferring an Existing Policy

Starting with a new policy can be cleaner because ownership and beneficiary designations are set correctly from day one. Transferring an existing policy into an ILIT can be possible in some cases, but it may involve extra steps, timing considerations, and tax planning questions. If this is on the table, it is typically reviewed with an estate planning attorney and a tax professional before any paperwork is signed.

Planning Issues to Discuss With Counsel

If you are exploring an ILIT, a good next step is a focused conversation with an estate planning attorney. The goal is not to “sell” yourself on the idea. It’s to make sure you understand the moving parts before anything is drafted or signed.

Here are practical topics many families in Spring, TX bring up during that review:

Trustee selection: Who will serve, what they are responsible for, and who steps in as successor trustee if needed.
Beneficiary terms and distribution controls: When beneficiaries receive funds, whether distributions are staged over time, and what guardrails exist if circumstances change.
Gift funding and record-keeping: How premium payments will be funded, how contributions are documented, and what records the trustee needs to maintain.
Handling changes after setup: What can be adjusted later, what cannot, and how updates are managed within the trust’s terms.
Fit with the broader estate plan: How the ILIT coordinates with wills, other trusts, business interests, and beneficiary designations across accounts.

Use these as discussion points, not a checklist to force an outcome. A well-advised plan should reflect your facts, your timeline, and your comfort with ongoing administration.

Common Mistakes and Red Flags

An ILIT can work well when it is set up thoughtfully and maintained consistently. Most problems show up when the trust is treated like a one-time formality and the ongoing details get ignored.

Common pitfalls to watch for:

Treating administration as optional: If notices, records, and premium handling are not managed, the structure can get messy fast.

Funding premiums without a paper trail: Premiums paid informally, or without clear documentation, can create avoidable questions later.

Letting names and provisions drift out of date: Trustees move, beneficiaries change, family situations evolve. If the trust is never revisited, the plan may no longer match the intent.

Assuming it is easy to change later: “Irrevocable” is there for a reason. Updates are often limited and should be discussed before the trust is created.

None of this is meant to scare people away. It is simply a reminder that an ILIT is a real legal structure with real responsibilities. A good process makes those responsibilities clear up front.

Quick ILIT Checklist for Spring, TX Residents

Use this quick checklist as a final “sanity pass” before an ILIT is set up, or before a policy is placed under a trust structure:

Confirm ownership and beneficiary setup. If the plan is for the trust to own the policy and receive the benefit, make sure the application and beneficiary designations match that intent.
Get clear on trustee responsibilities. Ask what the trustee will actually do day to day, and how recordkeeping, notices, and premium payments will be handled.
Verify beneficiaries and contingents. Confirm names, percentages, and distribution terms align with the broader estate plan, including how contingent beneficiaries are handled.
Ask how premium gifts will be tracked. Make sure there is a simple method for documenting contribution and payments so the file stays clean over time.
Identify what requires attorney involvement later. Ask what kinds of changes trigger an attorney update, and how the family should handle updates if circumstances shift.

It is a short list, but it covers the most common sources of confusion before they become real problems.