When To Use Irrevocable Life Insurance Trust? 
There are many scenarios when the use of an irrevocable life insurance trust can be helpful . As the name says , it 's an irrevocable trust . Once the grantor contributes an item to the trust -LRB- e.g. life insurance death benefits -RRB- , they can not make any changes to the terms of the trust or take anything back out of it . It 's commonly used for estate planning purposes . When an ILIT is the owner and beneficiary of a life insurance policy , the death benefits wo n't be included in the calculation of the gross estate of the insured - when life insurance is paid to an individual , they are included in the insured 's taxable estate . Another common scenario is to control how proceeds are distributed to minors , or in some cases a financially irresponsible adult . For example , you have an individual who is not yet a legal adult and stands to inherit a substantial amount of money from the death of the insured -LRB- e.g. parent -RRB- . An ILIT can be set up to have a percentage paid out at age 21 , then another percentage at age 25 , and the rest at age 30 -LRB- or whatever alternate payout structure is desired when the ILIT is set up -RRB- . 