Traditionally, the irrevocable life insurance trust (ILIT) provided advisors with a tool to create liquidity for a client’s estate without including the trust assets in the estate. In fact, the ILIT’s ability to solve liquidity needs overshadowed other benefits, such as wealth replacement, gifting strategies, accumulation needs, and creditor protection.
An ILIT makes it possible to:
- Remove life insurance death benefits from the taxable estate on the death of the insured;
- Allow the grantor to control the disposition of the policy and the death proceeds;
- Utilize the client’s annual gift tax exclusion to pay the premiums;
- Provide significantly increased asset protection during lifetime; and
- Provide the grantor with indirect access to the cash value build-up inside trust-owned insurance policies.
Below, view or download the comprehensive PDF on how ITILs work and the associated tax requirements:How Irrevocable Life Insurance Trusts (ILIT) Work
For more information call toll free