Irrevocable Life Insurance Trust for Married Individual: Trust for Spouse and Children (Texas)

This legal template outlines the creation and purpose of an Irrevocable Life Insurance Trust (ILIT) specifically designed for married individuals residing in the state of Texas under the jurisdiction of USA law.

An ILIT is a legal arrangement aimed at providing financial protection and estate planning benefits for individuals and their families. The primary purpose of this particular ILIT is to establish a trust specifically for the benefit of the insured individual's spouse and children.

By creating this trust, the insured individual (also referred to as the grantor) fundamentally ensures that the life insurance proceeds from their policy are protected and distributed in a manner that aligns with their intentions and desires. As the name suggests, once the ILIT is established, it becomes irrevocable, meaning the grantor cannot make any changes or revoke the terms of the trust without the consent of the beneficiaries and/or the court.

The ILIT offers several advantages, one of which is the potential for estate tax savings. Since the life insurance policy's proceeds are placed within a trust, they are no longer considered part of the grantor's taxable estate, reducing the overall estate tax liability. Additionally, the ILIT can ensure that the proceeds are utilized for specifically outlined purposes, such as providing financial support for the surviving spouse and children, covering education expenses, or maintaining family assets.

This particular template is tailor-made for married individuals and adheres to the legal requirements and regulations specific to the state of Texas. It addresses state-specific considerations, such as tax laws and any particular provisions or regulations that may exist regarding trust creation and administration within the state. Moreover, the template includes provisions that outline the division and distribution of the insurance proceeds among the spouse and children as per the grantor's wishes.

It is crucial to consider consulting with an attorney or legal professional experienced in estate planning and trust creation to ensure the template is accurately tailored to individual circumstances and that all legal requirements are met.