Irrevocable Life Insurance Trusts (ILITs)

An irrevocable life insurance trust (ILIT) is a trust that is set up as the owner and beneficiary of a life insurance policy. A client can make advanced estate planning strategies a cash gift to an ILIT to purchase a life insurance policy. When the client dies, the policy proceeds payable to the ILIT are excluded from the value of the estate for estate tax purposes.