Irrevocable Life Insurance Trust (ILIT): A Wealth Replacement Trust

Definition An irrevocable life insurance trust (ILIT; pronounced “eyelet” and also called a wealth replacement trust) is a trust that is funded, at least in part, by life insurance policies or proceeds. It is an effective estate planning tool that, if properly structured, may help avoid generation-skipping transfer, gift, and estate taxes, while providing a…

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