“Create an irrevocable life insurance trust structure showing Avery Morgan's annual gifts to the trust, an independent trustee, a $2M life insurance policy, the carrier's death benefit, and distributions to Morgan's children.”
Read the decisions behind it.
Show annual gifts to the trust.
Identify the independent trustee.
Show the trust's insurance policy.
Trace the death benefit and distributions.
Use this as a conceptual ILIT diagram. Tax treatment, ownership and notice requirements need review with qualified legal and tax advisers.
Other examples in this family.
Common questions
What does an ILIT diagram show?
It shows the grantor, irrevocable trust, trustee, policy, insurer and the path from gifts and proceeds to beneficiaries.
Who owns the policy in this example?
The trust is shown as owning the policy; the diagram should be changed if the policy records state otherwise.
Why is the insurer separate from the trust?
The carrier issues the policy and pays its death benefit, while the trustee administers the trust and its proceeds.