How does an ILIT avoid estate tax?
Quick Answer
An ILIT removes life insurance from your taxable estate by owning the policy itself, so you have no "incidents of ownership" under IRC §2042. Funded with annual exclusion gifts via Crummey notices, the death benefit pays out free of estate tax.
Warren Team
Updated December 27, 2025
37
Warren Team
Updated December 27, 2025
37
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