"Ultimate" and "Irrevocable Trusts" are probably two words that you wouldn't ordinarily combine together. Yet there have been rumblings of discussions among estate planning and elder law attorneys about this type of trust which is designed to be the owner and beneficiary of life insurance that has a long-term care insurance or chronic care rider. The Trust is designed to enable the Trustee to provide the insured with the long-term or chronic care benefits while still excluding the death benefits of the life insurance policy from the insured's estate. The invocation of the LTC rider would effectively fall under the Trustee's usual powers in an ILIT to enter into a loan transaction.
More to come on this topic as we learn more about this opportunity to reduce your taxable estate while enabling the ability to gain LTC coverage in an ever-tightening market for LTC policies.