What Is An Irrevocable Life Insurance Trust?

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    David RacichPRO
    Fountain Hills, Arizona
    An Irrevocable Life Insurance Trust (ILIT) is created to own life insurance as an entity that will not be included in the estate of the grantor. The ILIT is created and applies for life insurance as the owner of the policy. The grantor gifts the premium into the trust with assigned beneficiaries who will be the recipients of the life insurance death benefit proceeds. Consult an attorney to see if an ILIT is suitable for your situation.
     
     
    Answered on July 16, 2013
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    Peggy Mace
    Most of the U.S.
    Irrevocable Life Insurance Trusts are set up to own and be the beneficiary of life insurance policies for tax purposes. By removing ownership of the policy from the estate, it is possible to avoid paying estate taxes on life insurance proceeds.
    Answered on July 16, 2013
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