Why Use An Irrevocable Life Insurance Trust? 
If your federal estate obligations or state of residence tax exceeds the unified credit or state exemptions , you may want to consider using an Irrevocable Life Insurance Trust -LRB- ILIT -RRB- . If designed and set up by an estate tax attorney , an ILIT can hold a life insurance policy and distribute those death benefit proceeds to the trust beneficiaries tax free . If the life insurance were held in the estate , the proceeds were more than likely be subject to estate taxation at the second death of a married couple . Before moving forward with an ILIT seek out professional advice . 