what an ILIT is

Life insurance can be great in handling your taxes.  If you’ve gotten enough wealth that you expect your estate to be given extra tax at either the state or federal level, using life insurance in a trust is a good idea.  At the current time, you can give along $11.18 million to your children separate from paying any federal estate tax. Life insurance allows parents to give funding to cover estate taxes and provides other chances to protect your money. An irrevocable life insurance trust, known as an ILIT, is a good planning technique, and a unbelievable way to give a source of ready cash.  The funds can be used to pay estate taxes on a property or business, and allows the cash to move to your children outside your estate. Without this source of funds, the children may be forced to sell off real estate, stocks, family cars or a family business, simply to raise adequate cash to cover the home costs. The worst timing in the world, such as a declining stock market or lower home value could lead to the liquidation of assets at a low value.  A larger advantage of an irrevocable life insurance trust is that the assets included in the trust are not considered a portion of your estate for federal/estate tax purposes. The children aren’t expected to pay estate or inheritance taxes on the life insurance death benefits that are taken care of. While an irrevocable life insurance trust provides a few tax advantages, it is a complex legal plan.