An ILIT is an irrevocable life insurance trust. Irrevocable means can’t be revoked, can’t be changed once you set it up.

The most common reason for setting up this trust is to create a separate entity that owns the life insurance. Life insurance is considered property and the property of the life insurance in an ILIT is not owned by the insured person or persons thus it does not enter the estate of those insured people. When properly set up by your attorney and properly funded, the life insurance proceeds will come into the trust estate and income tax free and thus be available to buy estate assets and create cash for the estate to pay estate taxes.

There’s an interesting article in cincinnati.com which is the web site of the Cincinnati Enquirer, that town’s leading newspaper, that goes over this concept.

There’s another way, an interesting alternative, that can be used to both help your favorite charity or charities, eliminate estate taxes and still get your heirs the amount you want to leave them. The experts at Lifeinsure.com can tell you about this alternative.Š