Irrevocable Life Insurance Trusts


The irrevocable life insurance trust (ILIT) is one of the most widely used estate planning tools. Those who work in the estate planning field-or any professional who wants to extend his or her practice into this arena-should become knowledgeable about ILITs, and how and why they are used.

The purpose of this course is to provide a general understanding of trusts and how they work, with a specific focus on irrevocable life insurance trusts. Along with an exploration of ILITs, the course explains collateral issues that might arise in their creation and operation including a number of important tax-related issues.

Learning Objectives

Upon completion of this course, students should be able to:

  • demonstrate an understanding of the basic nature of trusts and the various ways in which they can be described
  • identify the parties to a trust, as well as their roles and responsibilities
  • outline how to fund an ILIT with a new life insurance policy and describe the kind of life insurance policy that should be used as a funding vehicle
  • recognize the tax issues that arise when funding an ILIT with an existing life insurance policy
  • demonstrate an understanding of the basic estate planning benefits that can be derived from utilizing an ILIT and what must be done to secure them
  • compare the potential advantages and disadvantages of utilizing an ILIT for estate-planning purposes
  • recall how the grantor trust rules, the kiddie tax, the generation-skipping transfer tax, and the rule against perpetuities, among others, may affect an ILIT
  • recognize how an ILIT can be used to achieve various estate-planning goals

Designed For

Life insurance producers, financial planners and advisors, CPAs


General knowledge of common types of trusts and life insurance policies.

Advanced Preparation


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