230 / Who are the parties to an irrevocable life insurance trust (ILIT)?

Typical parties to an irrevocable life insurance trust include a grantor, trustees and beneficiaries. The grantor typically creates and establishes the funding mechanism for the trust. In the case of an ILIT, the funding source would be a life insurance policy.

Gifts or transfers made to the ILIT are permanent, and the grantor relinquishes control over transferred assets to the trustee. The trustee manages the ILIT and is the individual holding the property in trust. Beneficiaries are those entitled to receive the benefits of the trust.¹

1. Restatement (Second) of Trusts § 3 (1959).