A better way to create and manage an Irrevocable Life Insurance Trust
Legata ILITs combine expert trust design with ongoing administration support, making it easy to create and manage a life insurance strategy that works year after year.
Why Choose a Legata ILIT?
ILITs are powerful, but only when they’re created and maintained correctly. Legata is built specifically to support ILITs over their full lifecycle.
Proper ILIT document creation
Federal Tax ID (EIN) procurement information
Funding and premium payment reminders
Withdrawal/Crummey notice creation, execution, delivery, and retention
Ongoing trustee and advisor support
What Is an ILIT (and Why It Matters)
An Irrevocable Life Insurance Trust (ILIT) is a trust that owns your life insurance policy instead of you owning it personally.
That structure can:
- Keep life insurance proceeds outside your taxable estate
- Protect assets from creditors
- Give you control over who receives the money, when, and how
The trust is irrevocable, meaning it can’t simply be undone. That permanence is what enables these benefits. And why proper administration matters.
How a Legata ILIT Works
Here’s a quick overview of how the Legata ILIT creation process works from start to finish.
01
Create your ILIT on the Legata platform
Legata facilitates a properly structured trust.
02
Set the rules
You choose the trustee, beneficiaries, and distribution terms.
03
Fund the trust correctly
The ILIT purchases a new policy or receives an existing one, with premium payment reminders handled through Legata’s workflows.
04
Withdrawal/Crummey notices, records, and documentation are managed and preserved in Legata.
05
When the time comes
The trustee distributes funds according to your instructions.
Own Your Legacy
Sophisticated planning. Fewer opportunities for mistakes.
ILITs are powerful, but only when they’re created and maintained correctly. Legata is built specifically to support ILITs over their full lifecycle.
Why People Use ILITs
- Reduce estate taxes on life insurance proceeds
- Control distributions to beneficiaries
- Protect assets from creditors and claims
- Provide liquidity without forcing asset sales
- Premiums missed or paid incorrectly
- Missing or undocumented Withdrawal/Crummey notices
- Poor recordkeeping over time
Built for Families. Trusted by Professionals
Legata ILITs work whether you’re implementing your own plan or partnering with an advisor.
- Families get clarity, structure, and confidence
- Professionals get a reliable ILIT solution, easier administration, and less risk
Inside the Legata ILIT Experience
Start with Legata
Legata ILITs vs. Traditional ILITs
Most ILITs are legally sound—but operationally fragile. The difference isn’t the trust document. It’s everything that happens after.
| Traditional ILIT | Legata ILIT | |
|---|---|---|
| Trust creation | Drafted once, then handed off | Created and structured in Legata |
| Ongoing administration | Manual, fragmented, often unclear | Built into Legata |
| Premium funding | Easily mishandled | Clear reminders |
| Withdrawal / Crummey notices | Manually created and tracked | Automatically created, delivered, and documented |
| Recordkeeping | Paper files, emails, or not retained | Centralized and preserved in Legata |
| Risk of errors | High over time | Significantly reduced |
| Confidence years later | Depends on perfect execution | Designed to hold up long-term |
ILIT FAQs
Do I really need an ILIT if I already have life insurance?
If you own your life insurance personally, the death benefit is often included in your taxable estate and exposed to estate taxes and creditors. An ILIT can remove the policy from your estate and give you control over how the proceeds are used, often making a significant difference for your Beneficiaries.
Can I use an ILIT with an existing life insurance policy?
Yes. An existing policy can be transferred into an ILIT. However, if you pass away within three years of the transfer, the IRS may still include the proceeds in your estate. Many people choose to have the ILIT purchase a new policy to avoid this risk.
Will I lose control of my money if I use an ILIT?
You give up ownership of the policy but not control of the plan. You decide the trust terms up front, including who benefits, how distributions work, and when funds are released. Those instructions continue to guide the trust long after it’s created.
What is a Crummey notice and why does it matter?
A Crummey notice (also called a withdrawal notice) is required when you contribute funds to an ILIT to pay premiums. It allows beneficiaries a short window to withdraw the contribution so the gift qualifies for the annual gift tax exclusion. Failing to send or document these notices properly can jeopardize the Trust’s tax benefits. Legata ILITs help manage your notices automatically.
Who should serve as trustee?
The trustee should be someone reliable and financially responsible, an individual or a professional Trustee who can follow the Trust terms and handle required administrative steps. Legata supports trustees with clear instructions and reminders.
How does Legata help after the ILIT is created?
Legata helps manage the ongoing responsibilities that often cause ILITs to fail, including premium funding reminders, Withdrawal/Crummey notice creation, delivery, and tracking, and centralized recordkeeping so your Trust stays compliant year after year.