Irrevocable Life Insurance Trusts (ILITs): Tax & Planning Essentials - Tech Session Webinar

This program provides a high-level overview of Irrevocable Life Insurance Trusts (ILITs), focusing on their role in estate planning, tax treatment, funding strategies, and ongoing administration. It highlights the distinction between income and estate tax treatment of life insurance, examines key structural and compliance considerations, and outlines the CPA’s role in ensuring proper implementation. The program also addresses gift tax mechanics, GST considerations, and practical issues that arise in administering ILITs, culminating in a case study illustrating planning outcomes with and without an ILIT.

Opening Remarks & Program Overview 9:00 AM – 9:05 AM

- Overview of ILIT planning objectives and structure

- Key themes: tax efficiency, liquidity, and administration

Why ILITs Matter 9:05 AM – 9:12 AM

- Income vs. estate tax treatment of life insurance

- Core use cases: liquidity, control, equalization, and planning integration

ILIT Structure & Estate Tax Mechanics 9:12 AM – 9:22 AM

- Trust ownership, trustee role, and beneficiary design

- Incidents of ownership and estate inclusion risks

- Three-year rule and planning implications

Funding & Gift Tax Considerations 9:22 AM – 9:32 AM

- Annual exclusion gifting and Crummey withdrawal powers

- Proper funding sequence and documentation

- Gift splitting and Form 709 considerations

GST & Income Tax Considerations 9:32 AM – 9:40 AM

- Overview of GST tax and exemption allocation

- Grantor trust treatment and income tax reporting

- Coordination between trust and individual returns

Administration & CPA Oversight 9:40 AM – 9:47 AM

- Ongoing administration requirements and common pitfalls

- Annual CPA review checklist and compliance considerations

- Importance of consistent execution and documentation

Case Study & Key Takeaways 9:47 AM – 9:50 AM

- Comparison of outcomes with and without an ILIT

- Practical implications for planning and CPA involvement