What is an ILIT?
An Irrevocable Life Insurance Trust (ILIT) is a trust designed to own life insurance outside of the insured’s taxable estate. When properly structured and administered, an ILIT can preserve the death benefit for beneficiaries while avoiding estate inclusion.
Understanding Irrevocable
Life Insurance Trusts
Why Families Use ILITs
Keep life insurance proceeds outside the taxable estate
Provide liquidity to pay estate taxes or expenses
Avoid probate and maintain privacy
Protect assets from potential creditors
Create long-term structure for beneficiaries
How an ILIT Works
The grantor establishes an ILIT and appoints a trustee.
The trust owns and is beneficiary of the life insurance policy.
The grantor makes contributions to the trust.
The trustee pays premiums and administers the trust.
Upon death, proceeds are paid to the ILIT and distributed per the trust terms.
Proper administration is essential to preserving these benefits.
Have Questions? Let's Talk.
If you’re considering a life insurance trust—or already have one in place—a short introductory call can help clarify next steps. We’re happy to answer questions, explain how the process works, and help you understand whether professional trust administration is a good fit for your situation.