Can Life Insurance Be Owned By A Trust? 
Yes , a life insurance policy can be owned by a trust . Irrevocable Life Insurance Trusts -LRB- ILIT 's -RRB- are designed to keep life insurance proceeds from being calculated in the value of a large estate , and thus avoid paying estate taxes . The ILIT must be set up at least 3 years before death for tax protection purposes . When an Irrevocable Life Insurance Trust is set up , the person whose estate is being protected can not have any incidences of ownership in the policy . 