ILIT
Certified Financial Planner glossary · Certified Financial Planner
Definition
Irrevocable life insurance trust designed to own a policy so proceeds can avoid estate inclusion if incidents of ownership are respected.
ILIT in plain English
Life insurance owned by the insured can land in the taxable estate at the worst possible moment. An ILIT is an irrevocable life insurance trust designed to own the policy so proceeds can avoid estate inclusion if incidents of ownership are respected. Transferring an existing policy into the trust can still pull proceeds back under Section 2035's three-year lookback. Watch recent transfers and retained powers, not only the trust label on the policy application.
Related Certified Financial Planner terms
Certified Financial Planner practice questions · Certified Financial Planner flashcards · Certified Financial Planner study guide