How Does an Irrevocable Life Insurance Trust Work?

How Does an Irrevocable Life Insurance Trust Work?

An irrevocable life insurance trust is when the trust is the owner of the insurance policy, which keeps the proceeds of the life insurance out of the taxable estate. Also, gifts can be made to fund the premiums, which will ultimately reduce the taxable estate. After your death, the trust’s assets – also known as the insurance proceeds – are available to your beneficiaries income-tax-free.

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