An Irrevocable Life Insurance Trust (“ILIT”) is a trust designed to own and be the beneficiary of life insurance in order to remove the death benefit of the insurance proceeds from estate taxation. This estate planning tool is mostly applicable to families who are subject to the federal estate tax (an individual worth more than $5,430,000 or twice that for a married couple) in order to save the 40% death tax that would otherwise apply to the death benefit.

There are many different considerations involved in properly designing an ILIT, including whether to establish it as a dynastic trust or a generation skipping trust; whether to gift or sell assets to the trust; whether it should be a grantor trust; as well as the structure of the duration of the trust and how distributions should be handled. Please call us today and set up an appointment if you would like to learn more about this powerful estate planning tool.