When preparing an estate plan for clients with sizeable estates, Irrevocable Life Insurance Trusts (ILITs) stand out as powerful tools for safeguarding assets and securing financial legacies.

When preparing an estate plan for clients with sizeable estates, Irrevocable Life Insurance Trusts (ILITs) stand out as powerful tools for safeguarding assets and securing financial legacies. By placing life insurance policies in an ILIT, individuals can mitigate estate taxes and protect their beneficiaries from potential financial burdens. The irrevocable nature of these Trusts ensures that, once established, terms cannot be altered, providing a stable foundation for long-term planning.

An ILIT is, as the name implies, a vehicle for holding life insurance policies. The primary goal of such a Trust is to shift the ownership of the policies from the insured's generation to a lower generation in order to remove the policy proceeds from taxation at the death of the insured and/or their spouse. In that way, the family can have a fund of cash which can be used to loan money to or purchase assets from a decedent's estate, thereby creating liquidity in the estate for payment of estate taxes, without the funds causing additional estate taxes at the death of the insured.

If you have questions about ILITs or other estate planning tools and techniques, give us a call at 253.858.5434 to set up an appointment today. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.