Does A Life Insurance Trust File A Tax Return? 
As a Grantor Trust , the income is reported on the grantor 's individual income tax return , so the Irrevocable Life Insurance Trust does not usually need to file a tax return . If there is no income in the policy , you may need to write an initial note to the IRS stating that . If income is over $ 600/year , you may need to use Form 1041 to file a tax return for that year . Contact your tax consultant to get the final word on this . 