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Simple English definitions for legal terms

irrevocable life insurance trust (ILIT)

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A quick definition of irrevocable life insurance trust (ILIT):

An irrevocable life insurance trust (ILIT) is a special type of trust that helps people protect the benefits from a life insurance policy from estate taxes. Once the trust is created, the person who created it cannot change it. This means that the premiums from the life insurance policy can avoid estate taxes. If the policy were not created under an ILIT, the insurance benefits plus other assets of the person who passed away could trigger both state and federal estate taxes. ILITs also allow the person who created the trust to choose a manager of assets and how the beneficiaries receive them. This means that the person who passed away can instruct the trustee to do things like prevent the beneficiaries from wasting the benefits or spread the assets among beneficiaries depending upon their needs.

A more thorough explanation:

An irrevocable life insurance trust (ILIT) is a type of trust that allows individuals to ensure that the benefits from a life insurance policy can avoid estate taxes and follow the interests of the insured. The ILIT must be irrevocable, meaning that the insured cannot change or undo the trust after its creation. This allows the premiums from the life insurance policy to avoid estate taxes.

For example, let's say that John has a life insurance policy worth $1 million. If John were to pass away, his beneficiaries would receive the $1 million from the policy. However, if John did not create an ILIT, the $1 million would be included in his estate and could be subject to estate taxes. By creating an ILIT, John can ensure that the $1 million from the policy will not be subject to estate taxes.

ILITs also allow the insured to choose a manager of assets and how the beneficiaries receive them like other trusts. For instance, John can instruct the trustee to prevent the beneficiaries from wasting the benefits or spread the assets among beneficiaries depending upon their needs. This gives John more control over how his assets are distributed after his death.

In summary, an ILIT is a useful tool for individuals who want to ensure that the benefits from a life insurance policy can avoid estate taxes and follow their wishes. By creating an ILIT, individuals can have more control over how their assets are distributed after their death.

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19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
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