Irrevocable Life Insurance Trust (I.L.I.T.)
An Irrevocable Life Insurance Trust (I.L.I.T.) is a specialized estate planning tool designed to remove life insurance proceeds from a taxable estate, ensuring tax-efficient wealth transfer. By placing a life insurance policy inside an I.L.I.T., high-net-worth individuals can protect assets from estate taxes while maintaining control over how proceeds are distributed to beneficiaries.
Key Benefits of an I.L.I.T.
- Estate tax reduction, Life insurance proceeds are excluded from the taxable estate.
- Asset protection, Shields policy proceeds from creditors and legal claims.
- Controlled distribution, Ensures beneficiaries receive funds according to structured terms.
- Liquidity for estate planning, Provides cash to cover estate taxes or other obligations without forcing asset sales.
An I.L.I.T. can be a critical tool for high-net-worth individuals looking to preserve wealth and minimize estate tax exposure. Contact us to determine if an I.L.I.T. aligns with your estate planning strategy.
Tax law changes often. This is general information, not advice for your specific situation. Talk with us before you act on it.