Proper timing for irrevocable life insurance trusts

I was recently confronted with an old problem: when does an Irrevocable Life Insurance Trust (“ILIT”) have to be in place? If a client applied for life insurance before the trust was complete, does the policy’s death benefit come into the client’s estate if he or she dies within three years? Clearly, the issuance of an insurance policy and the existence of an ILIT can have important tax consequences of which advisors, agents, and clients should be aware.

Proper timing for irrevocable life insurance trusts