How Does An Irrevocable Life Insurance Trust Work? 
An Irrevocable Life Insurance Trust -LRB- ILIT -RRB- is the owner and beneficiary of the life insurance policy . As such , the person who took out the policy does not have any incidences of ownership in the policy , and the policy will not go into his/her estate upon death . If done early enough , this can avoid estate taxes paid on the proceeds of the life insurance . However , the trust is irrevocable and the person taking out the policy is no longer the decision maker for the policy , once the trust owns it . So you must use caution and wisdom in setting up an Irrevocable Life Insurance Trust . 