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Building Flexibility Into the Irrevocable Life Insurance Trust  

Author:  Gary A. Zwick.

Source: Volume 24, Number 03, Spring 2007 , pp.211-225(15)

Journal of Taxation of Investments

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The irrevocable life insurance trust (ILIT) remains one of the most effective and risk free estate planning techniques available to taxpayers of wealth. Individuals willing to combine charitable giving with a dynastic life insurance trust can conceivably transfer wealth free of transfer tax forever, while giving each succeeding generation nearly complete access to the funds at the same time as the trust property is protected from an ex-spouse in divorce or a beneficiary’s creditors. Even people with modest estates can achieve dramatic results. Generally, the standard irrevocable life insurance trust does its job without placing the donor in harm’s way from a tax standpoint because most of the tax law that underlies the technique is well settled. Even where the taxpayer has failed to follow proper procedures, tax exposure can be minimized.


Affiliations:  1: Walter & Haverfield LLP.

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