What is an irrevocable life insurance trust (ILIT)?

An irrevocable life insurance trust (ILIT) is a type of trust fund that is created to hold a life insurance policy in Kansas. It is an arrangement between the trustmaker and the beneficiary so that the trustmaker can pass on assets without having to pay estate taxes. The trustmaker, also known as the grantor or settlor, can transfer ownership of a policy to the trust so that the beneficiary, named by the trustmaker, can receive the death benefit without having to pay taxes. Generally, the trustmaker does not revoke or change the trust, as the name implies, meaning that once the trust is created, it is fixed and binding, and cannot be altered or changed unless the trustmaker obtains permission from the beneficiaries. The trustmaker can appoint a trustee to manage the trust, invest the trust funds, and pay any expenses associated with the trust. Furthermore, the trustmaker has the authority to manage the trust and can set up certain conditions for the beneficiaries to follow. An ILIT is a great way to pass on assets to loved ones without having to pay significant estate taxes.

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What is an irrevocable life insurance trust (ILIT)?

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