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Irrevocable Life Insurance Trust (ILIT): Keeping Proceeds Outside Taxable Estate

How ILIT structures work, when they help, and where administration failures create problems.

Structural Purpose

  • ILITs can remove policy proceeds from insured estate if structured and operated correctly.
  • Trust ownership and premium gift administration require strict process.
  • Policy selection should match trust purpose: liquidity, equalization, or tax planning.

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