Free Consultation

Connecticut Estate Tax Planning

Irrevocable Life Insurance Trust Lawyer in Connecticut

Keep your life insurance working for your family, not for the government.

Schedule a Free Consultation
shutterstock_2735093515

A reputation built on trust

65+ Client Reviews

CT & NY Licensed | WealthCounsel Member

20+ Years of Experience

Plain-English Estate Planning

What Is an Irrevocable Life Insurance Trust (ILIT)?

An irrevocable life insurance trust lawyer helps you do one important thing: keep your life insurance out of your taxable estate so more of the death benefit reaches your family. An irrevocable life insurance trust, or ILIT, is a trust that owns your life insurance policy for you instead of you owning it in your own name.

Here is why that matters. When you own a policy yourself, the payout is usually counted as part of your estate when you pass, which can push you over Connecticut and federal estate tax thresholds. When an ILIT owns the policy, the death benefit is paid to the trust rather than directly to your estate, so it stays out of that tax calculation.

The trade-off is right in the name. An ILIT is irrevocable, which means that once it is set up, it cannot easily be changed or undone. That is exactly why the setup matters so much, and why it helps to have a lawyer who does this work walk you through it before you commit.

Holds your life insurance policy outside your personal ownership

Keeps the death benefit out of your taxable estate

Delivers the payout to your family through the trust, on your terms

Set up once, carefully, because it is meant to be permanent

Is This You?

Who Gets the Most Value From an ILIT?

An ILIT is not for everyone, and we will tell you honestly if it is not the right fit. It tends to make the biggest difference for families in these situations.

pexels-karola-g-7876197

Families Facing Estate Tax

Households whose estate may be subject to the Connecticut or federal estate tax. A large policy can be the very thing that tips you into taxable territory.

shutterstock_2731361351

High-Net-Worth Gold Coast Families

Families across Fairfield County and the Gold Coast with significant life insurance policies who want the full death benefit to reach their heirs intact.

b089866f1e9feaefb112cd36e7a40444247e402d

Business Owners

Owners using life insurance as part of a buy-sell agreement or succession plan who need the proceeds structured cleanly and kept out of the estate.

What It Protects Against

What an Irrevocable Life Insurance Trust Protects Against

Most people set up an ILIT to solve a specific worry. Here are the three we hear about most, in plain English.

shutterstock_2744377467

Estate Tax on Life Insurance Proceeds

Life insurance you own in your own name is typically counted as part of your taxable estate. Connecticut has its own estate tax with its own threshold, separate from the federal one, so many families with sizable policies are already in taxable territory without realizing it. An ILIT removes the policy from your estate entirely.

getty-images-YbzaLvTAKjE-unsplash (1)

Loss of the Death Benefit to Creditors

Assets held inside an irrevocable trust are no longer personally yours, which makes them much harder for creditors to reach. The death benefit passes to the people you named, the way you intended, rather than being pulled in to settle outstanding debts.

pexels-mikhail-nilov-6963066

Unintended Estate Complications

Without an ILIT, a single large life insurance payout can push an otherwise manageable estate into estate tax territory unexpectedly. Planning ahead with an ILIT prevents that surprise before it ever happens.

How It Works

How an Irrevocable Life Insurance Trust Works

The structure sounds technical, but the steps are straightforward once you see them laid out. Here is the plain-English version.

shutterstock_2760179561

You create the trust

You set up the irrevocable trust and name a trustee to manage it for your beneficiaries.

The trust owns the policy

The trust applies for and holds the life insurance policy, so it is never in your personal name.

You fund the premiums

You make annual gifts to the trust to cover the premium payments. These gifts usually fall under the annual gift tax exclusion, so they do not eat into your lifetime exemption.

Your family is paid

When you pass, the death benefit goes to the trust and is distributed to your beneficiaries exactly as you instructed.

Beneficiaries get notice

Before each gift, the trustee sends short notices called Crummey letters, which give beneficiaries a brief window to withdraw the gift. That step is what lets the contributions qualify for the annual exclusion. In practice, they typically let the window pass so the money stays in the trust for the premium.

Because Connecticut and federal estate tax thresholds change over time, we build your ILIT around where the numbers stand today and where your family is headed. This is a permanent structure, so the details are worth getting right the first time.

Schedule a free consult

Our Process

How Inner Circle Sets Up an Irrevocable Life Insurance Trust

Setting up an ILIT should feel clear, not intimidating. We keep the process simple and stay with you through every step.

Strategy Session

We listen first, learn your goals and your estate tax picture, and confirm whether an ILIT is the right tool for you.

Collaborative Design

We build the trust together, coordinating with your financial advisor and insurance professional where it helps, and explain every decision in plain English.

Signing and Follow-Through

We finalize your documents and stay involved with the ongoing pieces, like Crummey letters and premium gifting, so the trust actually does its job.

Our engagements are flat-fee and transparent, with no surprise billing. You will know what it costs before you commit. As your trusted Connecticut trust attorney, we handle the details so you can focus on your family.

Schedule a free consult

Real Families, Real Peace of Mind

Why Connecticut Families Trust Inner Circle

I have worked with Bryan Etter for the past four years on probate and estate planning matters, and I highly recommend him. He takes the time to thoroughly explain my options, making sure I feel confident and informed in every decision.

Robert Nichols Estate Planning Client

I have had the pleasure of working with Bryan for the past few months. He very quickly put an Estate Plan in place for my mother when we were in crisis. When she passed, he came to my home immediately, explained what comes next, and put my mind at ease.

Lisa Hammersley Estate Planning Client

Recently, I contacted Bryan Etter to consider a living trust. He was very thorough in explaining options. I felt very comfortable with his presentation. We went on to complete a trust. I'd definitely recommend him for any Estate Planning.

Charles Leigus Estate Planning Client

Inner Circle Legal Planning, PLLC exceeded my expectations in every way. Their professionalism and organization are outstanding. Bryan Etter, in particular, stands out for his knowledge, responsiveness, and genuine kindness.

Deborah Lombardi Estate Planning Client

Estate Planning is never easy, but thankfully, I came across Bryan Etter online in early Fall, who came highly recommended by his many positive reviews. Bryan immediately put my mother and I at ease during our initial consultation.

John Vairo Estate Planning Client

I feel compelled to share the wonderful experience I had working with Bryan Etter in my Estate Planning. I had thought that I only needed a will, but Bryan explained several other aspects of this process, such as needing a Health Care Proxy, etc.

Barbara Coppola Estate Planning Client

I've had the fortunate opportunity to work with Bryan and his team on multiple occasions, and each time has been better than the last. He's extremely patient, detail-oriented and always very responsive, regardless of how simple my questions may be.

Matthew Gunn Estate Planning Client

Working with Bryan was a very good experience for me. I wanted to be sure all of my affairs were in order, to make life easier for my children when the inevitable occurs. Bryan was very professional and clear about every aspect of making a trust.

Virginia Metaxas Estate Planning Client

Just recently my wife and I were looking for a law firm that handles Estate Planning and the process we would need to complete this task. We chose Bryan's team and couldn't be more satisfied with the knowledge and professionalism his team provided.

Bill Valintas Estate Planning Client

Throughout the process, Bryan patiently explained each step to me. He was always professional yet friendly, responsive, and conscientious. I'd highly recommend Bryan to anyone looking for an estate planning attorney.

Marion Coleman Estate Planning Client

Common Questions

Frequently Asked Questions About Irrevocable Life Insurance Trusts

What is the purpose of an irrevocable life insurance trust?

The main purpose is to keep your life insurance out of your taxable estate. When the trust owns the policy instead of you, the death benefit is paid to the trust and stays out of your estate tax calculation, so more of it reaches your family. It can also protect the payout from creditors and control exactly how and when your beneficiaries receive it.

Can I transfer an existing life insurance policy into an ILIT?

Yes, you can transfer an existing policy into an ILIT, but there is a catch worth knowing. The IRS applies a three-year look-back, so if you pass within three years of the transfer, the policy can still be pulled back into your taxable estate. For that reason, many families have the trust apply for a new policy from the start. We help you weigh which path fits your situation.

What is a Crummey letter and why do I need one?

A Crummey letter is a short notice the trustee sends your beneficiaries each time you gift money to the trust for premiums. It gives them a brief window to withdraw that gift. That withdrawal right is what allows your contributions to qualify for the annual gift tax exclusion. In practice, beneficiaries usually let the window pass so the money stays in the trust to pay the premium.

How does an ILIT affect Connecticut estate taxes?

Connecticut has its own estate tax with its own threshold, separate from the federal one. Life insurance you own personally counts toward that threshold, and a large policy can push your estate into taxable territory. Because an ILIT removes the policy from your estate, the death benefit is not counted, which can meaningfully reduce or avoid the Connecticut estate tax on those proceeds.

How long does it take to set up an irrevocable life insurance trust?

Most ILITs are complete within a few weeks from your first strategy session to signing, though timing depends on your estate tax picture and how quickly the policy is issued or transferred. We map out a clear timeline for you at the start so there are no surprises.

Protect the Death Benefit

Make Sure Your Life Insurance Reaches the People You Love

You bought life insurance to take care of your family. An ILIT makes sure the government does not take a share of it first. Sit down with a Connecticut irrevocable life insurance trust lawyer who explains everything in plain English and gets the details right the first time. Your consultation is free.

Schedule a free consult
getty-images-qaGCv1ZburY-unsplash copy