Irrevocable Life Insurance Trusts _OH

Study Level: Advanced
Delivery Method: Online Self-Study
Field of Study: Specialized knowledge - Life Insurance and Estate Planning
Prerequisites: There is no formal prerequisite for the course; however, an understanding of life insurance and basic estate planning techniques would be beneficial.

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 the basic features of ILITs, the course explains collateral issues that might arise in the creation and operation of ILITs, including a number of important tax-related issues.

The course examines a number of ways in which an ILIT can be used to achieve estate planning goals.  

The course includes the following chapters:

  • Trust Background and Basics
  • Tax Issues Affecting the Creation of a Trust
  • Unfunded Irrevocable Life Insurance Trusts
  • ILITs That Address Specific Estate Planning Needs

This is an advanced level course. 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


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