An Irrevocable Life Insurance Trust or ILIT has four (4) unique elements of life insurnace, in the context of estate planning, that make it an attractive investment.
- Lifetime Values The difference between the lifetime value and the death benefit make ILITs an attractive candidate to transfer policies into.
- Income Tax Free!!! Life insurance explodes with value when the insured dies; dollars of initial invesetment premiun can turn into thousands of dollars of death benefits – income tax free!!!
- GST Leverage Life Insurance premiums represent a fraction of the death benefit value, and when the policy is held in an ILIT, the grantor’s annual gift tax exclusion, gift tax applicable exclusion amount, and generation skipping transfer (GST exemption) can be significantly leveraged.
- Multiple Beneficiaries An ILIT allows multiple beneficiaries to have any interest in the death benefits, with management and control of the policy and death benefits being handled by the Trustee.
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