How Does An Irrevocable Life Insurance Trust Work? 
Ideally the grantor creates an irrevocable life insurance trust -LRB- ILIT -RRB- for the benefit of their targeted beneficiaries . The ILIT must be dated before the life insurance policy date of issuance as well . The ILIT must own the life insurance policy day one . To comply with the law most ILITs use annual Crummy letter notification and sometimes may include hanging powers . Before moving forward with the ownership arrangement of an ILIT consult your legaladviser . 