While you and your spouse live, your Trustee will take the money you transfer to the ILIT each year and use it to pay your insurance premiums. Your Trustee may also oversee such administrative duties as the annual notification to your beneficiaries called a "Crummey Letter" , and the filing of the ILIT 's tax return, .Insured 's spouse. The insurance proceeds will usually be free of income tax as well. The ILIT will preserve any exemption from claims of the creditors of the insured which is granted under state law. Finally, the trustee will . Premium payments by you may require the filing of a federal gift tax return IRS Form 709 . You are .Blog. Life Insurance Trusts: Consider the Need to File a Gift Tax Return. April 14th 2016 - Posted by Christopher J. Yoson. Life insurance policies held in irrevocable trusts commonly referred to as "ILITs" - Irrevocable Life Insurance Trusts are most commonly funded through gifts of cash to the trust, usually by the grantor of .
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Administration of an ILIT. The principal function of an ILIT is to own and be the beneficiary of one or more life insurance policies. The principal motivation for adopting an ILIT is to cause the proceeds of the life insurance to escape estate taxes not only at the of an insured but also at the of the insured's spouse..
Undiminished by estate tax. How an ILIT works Irrevocable Life Insurance Trust ILIT Filing tax returns, .