Irrevocable Life Insurance Trust. A type of irrevocable trust designed to hold life insurance so it will not be taxed in the insured's estate. Intestacy: The state of dying without a will. State law governs who gets the property owned by the deceased person.
Irrevocable Life Insurance Trust. An irrevocable life insurance trust is a trust that cannot be changed (revoked) or cancelled once it is established. The trustee owns a policy on the insured's life and the trust is the beneficiary of the insurance proceeds following the insured's death. It lets you reduce or even eliminate estate taxes, so more of your estate can go to your loved ones. It also gives you more control over your insurance policies and the money that is paid from them.
Irrevocable Life Insurance Trust. By placing insurance in a properly designed ILIT, the death benefit will not be subject to income, estate, gift or penalty tax on the death of the insured. The entire death benefit passes to the heirs. For a large number of people, the proper use of life insurance is the most efficient way to distribute their wealth.