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An Irrevocable Life Insurance Trust (ILIT) is a trust that can be used to transfer proceeds from a life insurance policy to children or other beneficiaries without gift tax or estate tax. If you own a life insurance policy, proceeds will be part of your estate when you die and therefore subject to estate taxes. With an Irrevocable Life Insurance Trust, the insurance proceeds are not considered as a part of your estate when you die.
To make sure the insurance policy will not be in your estate and be subject to estate tax, it is important not to have any "incidents of ownership" in the policy. The life insurance trust must be an Irrevocable Life Insurance Trust, meaning you can't revoke or change any terms in the trust. Other assets like real estate, stocks or investments can be protected from some taxes with a Revocable Trust or an Irrevocable Trust.
An Irrevocable Life Insurance Trust can help you with concerns over estate tax concerns. An experienced estate planning lawyer who practices estate planning cases can prepare Irrevocable Life Insurance Trusts tailored to your situation.
If you or and your loved one needs to set up an Irrevocable Life Insurance Trust, contact Attorney Search Network. We can help you find an experienced estate planning lawyer that can assist you with Irrevocable Life Insurance Trusts.
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