Every estate planning professional needs to stay on top of all the various techniques when protecting their client’s assets. An “ILIT” is a trust that cannot be rescinded, amended or modified in any way after its creation. Once the grantor contributes property or life insurancedeath benefits to the trust, he or she cannot change the terms of the trust or reclaim any property left to the trust.

There are three good reasons to utilize an ILIT. The first is for estate tax considerations, the second is for concern of leaving a large sum of money unsupervised to a minor or an irresponsible adult, andlastly for asset protection concerns.

If an ILIT is properly structured, the death benefits paid to the trust will be free from inclusion in the gross estate of the insured. This is different from when life insurance death benefits are paid to an individual, as the proceeds are included in the taxable estate of the decedent. If you would like to learn more, consider registering for our on-demand CLE webinar How to Use an Irrevocable Life Insurance Trust to Exponentially Enhance the Effectiveness of Your Client’s Estate Plan.