Irrevocable Life Insurance Trust Template

What Is the Irrevocable Life Insurance Trust Template?

This trust creates a separate legal entity that owns life insurance on your life. You transfer existing policies or have the trustee purchase new coverage. Because you surrender all control over the policies, they no longer count as part of your taxable estate. The trust includes Crummey withdrawal provisions that let your premium contributions qualify for the annual gift tax exclusion, preventing you from burning through your lifetime exemption.

The template covers trustee selection and succession, premium payment procedures, beneficiary withdrawal rights with proper notice requirements, distribution planning for insurance proceeds after your death, and administrative provisions that satisfy IRS requirements for estate tax exclusion. It addresses the three-year lookback rule, grantor trust tax treatment, and spendthrift protections that shield proceeds from beneficiary creditors.

 

 

Is This Irrevocable Life Insurance Trust Right for You?

You need this agreement if you're:

• Carrying substantial life insurance approaching federal exemption thresholds
• Building generational wealth that needs protection from estate taxation
• Currently paying premiums on policies you own directly
• Planning estates that will exceed exemption amounts after appreciation
• Concerned about state estate taxes with lower exemption limits
• Wanting creditor protection for death benefits passing to heirs

You definitely need this agreement if:

• Your estate plus life insurance exceeds federal exemption thresholds
• You own policies that could trigger 40% estate tax
• You're making annual premium gifts that burn lifetime exemption
• Your beneficiaries face creditor exposure without trust protection
• You lack formal structure for life insurance estate planning

 

Why Thousands Trust Legal GPS Templates

Save Money: Estate attorneys charge $3,000 to $7,000 for irrevocable life insurance trusts. Our template costs $35.

Save Time: Download immediately and complete in under two hours with our detailed guide.

Look Professional: Attorney-quality drafting with proper legal terminology courts and financial institutions recognize.

Keeps You Out of Court: Comprehensive Crummey withdrawal provisions, three-year rule compliance, proper spendthrift protections, and IRS-approved estate tax exclusion language prevent challenges to your planning.

 

 

 

Get Protected in 3 Simple Steps

Step 1: Secure Checkout

Complete your purchase through our encrypted payment system. Receive instant access to your template.

Step 2: Instant Download

Download your irrevocable life insurance trust template immediately. Access the comprehensive how-to guide that walks you through every decision point.

Step 3: Fill In the Highlighted Fields

Complete the customizable sections following the detailed guidance. Review with your estate planning attorney and execute with proper notarization.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. After purchase, you can use the template as many times as needed. Create trusts for multiple policies or update your planning as circumstances change.

Is this contract legally binding?

Yes. When properly completed, notarized, and executed, this creates an enforceable irrevocable trust recognized by courts and the IRS. The template includes all provisions required for estate tax exclusion.

What's the difference between this and owning life insurance directly?

Policies you own directly are included in your taxable estate. A $2 million policy in a $10 million estate could trigger $800,000 in estate taxes. This trust removes the policy from your estate while maintaining benefits for your family.

Can I change the trust after signing it?

No. This is an irrevocable trust that cannot be amended or terminated by you after execution. That's what creates the estate tax benefits. However, the template includes trust protector provisions that allow modifications to administrative terms if tax laws change.

Do I need to transfer existing policies or buy new ones?

Either approach works, but they have different tax consequences. Transferring existing policies triggers a three-year lookback period where the IRS includes them in your estate if you die within three years. Having the trustee purchase new policies directly avoids this rule entirely.

What are Crummey withdrawal rights and why do I need them?

These give beneficiaries a temporary right to withdraw contributions you make to the trust. Because they have this right, your contributions qualify for the annual gift tax exclusion rather than consuming your lifetime exemption. The template includes all required notice procedures and lapse provisions.