Irrevocable Life Insurance Trust (ILIT) - Delaware
IRREVOCABLE LIFE INSURANCE TRUST (ILIT)
Trust name: [FULL TRUST NAME]
Date of trust: [__/__/____]
Settlor and proposed insured: [SETTLOR FULL LEGAL NAME], [ADDRESS]
Initial Trustee: [TRUSTEE FULL LEGAL NAME], [ADDRESS]
1. Creation and initial funding
I, the Settlor, presently transfer $[AMOUNT GREATER THAN ZERO] in cash to the Trustee to hold under this instrument. The Trustee accepts the property and trusteeship by signing below and acknowledging actual receipt in Schedule A. The trust begins on the Date of Trust. The Trustee may accept later contributions in a signed receipt. Property merely listed or promised but not delivered is not part of this trust.
This trust is irrevocable. The Settlor reserves no power to revoke or amend it, direct distributions, reclaim trust property, change a policy's owner or beneficiary, borrow against a policy, or otherwise exercise an ownership right in a trust policy. The Settlor is not a beneficiary and shall not serve as Trustee. Applicable law or a court with jurisdiction may authorize a modification; this instrument creates no unilateral amendment power.
2. Insurance purpose and administration
The Trustee shall use trust property to apply for and, if available on acceptable terms, purchase a new life insurance policy on the Settlor's life. The Trustee, acting independently, shall be both the policy owner and named beneficiary. Policy number, carrier, face amount, premium schedule, and issue date shall be recorded in Schedule B after issuance. No existing policy is transferred by signing this instrument; a later transfer requires a separate insurer-accepted assignment and tax review.
The Trustee shall decide whether to accept a policy, pay premiums from available trust property, maintain or replace coverage, exercise policy options, and collect proceeds. The Trustee shall not be required to pay a premium from the Trustee's own funds. The Settlor has no authority to instruct the insurer or Trustee about a policy. If a policy is not issued or lapses, the Trustee shall preserve and administer any remaining trust property under this instrument.
The Trustee shall keep trust funds separate, maintain records of contributions, policy ownership, premiums, insurer notices, expenses, and proceeds, and provide an annual written account to the adult current beneficiary named below. The Trustee may pay reasonable trust expenses and compensation from trust property.
3. Beneficiary and distributions
The sole current beneficiary is [PRIMARY BENEFICIARY FULL LEGAL NAME], born [__/__/____]. The Settlor is not a beneficiary. While the Settlor is living, the Trustee shall retain trust property for insurance premiums and necessary administration and shall make no beneficiary distribution.
Upon the Settlor's death, the Trustee shall claim any death proceeds, pay proper trust liabilities and expenses, and terminate the trust after collection and settlement. The Trustee shall then distribute 100% of the remaining trust property outright as follows:
- To [PRIMARY BENEFICIARY FULL LEGAL NAME], if living at the Settlor's death;
- Otherwise to [ALTERNATE BENEFICIARY FULL LEGAL NAME], if living at the Settlor's death;
- Otherwise to [FINAL CHARITABLE BENEFICIARY LEGAL NAME AND ADDRESS], if then in existence; and
- If that organization no longer exists, to the estate of [PRIMARY BENEFICIARY FULL LEGAL NAME].
The Trustee shall not make loans to or purchase property from the Settlor's estate under this instrument. No named recipient may be the Settlor or the Settlor's estate.
4. Spendthrift direction
Before actual receipt by a beneficiary, that person's interest may not be voluntarily or involuntarily transferred or pledged. The Trustee shall not honor an attempted assignment. This provision operates subject to 12 Del. C. § 3536 and other applicable law.
5. Successor trustees and powers
If the Trustee dies, resigns, becomes unable to act, or declines, [FIRST SUCCESSOR TRUSTEE FULL LEGAL NAME AND ADDRESS] shall serve. If that person cannot serve, [SECOND SUCCESSOR TRUSTEE FULL LEGAL NAME AND ADDRESS] shall serve. Neither successor may be the Settlor. A successor accepts in a signed writing delivered to the outgoing Trustee or, if none, to the current beneficiary. The outgoing Trustee shall deliver trust property and records to the successor. If all appointments fail, a successor may be appointed under 12 Del. C. § 3327A.
The Trustee may exercise the powers available under 12 Del. C. § 3325, including collecting property, paying expenses, exercising rights under life insurance payable to the Trustee, and collecting proceeds. The Trustee shall use those powers for the trust's purposes and account for their exercise.
6. Governing law, disputes, and tax review
Delaware law governs administration while the trust is administered in Delaware, subject to 12 Del. C. § 3332 and controlling law. A trust dispute may be brought in a court with jurisdiction. The Court of Chancery has equity jurisdiction under 10 Del. C. § 341, subject to § 342 where another court affords a sufficient remedy. A court may order relief for breach of trust under 12 Del. C. § 3581. No clause excuses or indemnifies a fiduciary for the fiduciary's own wilful misconduct, and this instrument sets no blanket cap on fiduciary liability.
The Trustee shall give the Settlor and beneficiaries the information reasonably needed by their tax advisers. Any federal gift, estate, or generation-skipping transfer tax treatment must be determined independently; this instrument makes no GST-exemption allocation or tax-exclusion promise. See 26 U.S.C. §§ 2601 and 2631 for the federal GST framework.
7. Signatures and witnesses
The Settlor signs this writing in the presence of the two undersigned disinterested witnesses. Each witness signs in the Settlor's presence. A witness should have no beneficial interest materially increased or decreased by creation of this trust. See 12 Del. C. § 3545(a).
Settlor signature: __________________________ Date: [__/__/____]
Printed name: [SETTLOR FULL LEGAL NAME]
Witness 1 signature: _______________________ Date: [__/__/____]
Printed name and address: [WITNESS 1 FULL LEGAL NAME AND ADDRESS]
Witness 2 signature: _______________________ Date: [__/__/____]
Printed name and address: [WITNESS 2 FULL LEGAL NAME AND ADDRESS]
I accept the trusteeship and the property listed in Schedule A.
Trustee signature: __________________________ Date: [__/__/____]
Printed name: [TRUSTEE FULL LEGAL NAME]
Schedule A — Initial property and receipt
Cash actually delivered to Trustee: $[AMOUNT GREATER THAN ZERO] on [__/__/____].
Delivery method: [METHOD].
Trust account or holding location: [ACCOUNT OR LOCATION].
I acknowledge actual receipt of this cash for [FULL TRUST NAME].
Trustee receipt signature: __________________________ Date received: [__/__/____]
Schedule B — Policy record
New policy carrier: [CARRIER OR “NOT YET ISSUED”]
Policy number: [NUMBER OR “NOT YET ISSUED”]
Issue date: [__/__/____ OR “NOT YET ISSUED”]
Face amount: $[AMOUNT OR “NOT YET ISSUED”]
Owner: [TRUSTEE AS TRUSTEE OF FULL TRUST NAME]
Beneficiary: [TRUSTEE AS TRUSTEE OF FULL TRUST NAME]
Premium amount and due dates: [DETAILS OR “NOT YET ISSUED”]
About this template
- Last updated
- October 21, 2026
- Citations checked
- October 21, 2026
- Jurisdiction
- Delaware
- Category
- Estate Planning & Wills
Legal authority
- 12 Del. C. § 3303(a)
- 12 Del. C. § 3325
- 12 Del. C. § 3327A
- 12 Del. C. § 3332(b)
- 12 Del. C. § 3536(a)
- 12 Del. C. § 3545(a)
- 12 Del. C. § 3581(b)(3)
- 10 Del. C. § 341
- 10 Del. C. § 342
- 26 U.S.C. § 2601
- 26 U.S.C. § 2631(a)-(c)
Estate planning documents decide what happens to your property, your children, and your medical care when you cannot make those decisions yourself. Wills, trusts, powers of attorney, and health care directives each serve different purposes and each have to meet state law requirements for signing, witnessing, and notarization. A document that looks fine on the page but was not executed correctly can be rejected in probate, which is exactly when it is too late to fix.
Not legal advice
This template is provided for informational purposes. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.
Checked against the law it cites
A reviewer verified this template's legal citations against the official source on October 21, 2026.
26 U.S.C. § 2601 (checked October 21, 2026): "A tax is hereby imposed on every generation-skipping transfer (within the meaning of subchapter B)."
26 U.S.C. § 2631(a)-(c) (checked October 21, 2026): "For purposes of determining the inclusion ratio, every individual shall be allowed a GST exemption amount which may be allocated by such individual (or his executor) to any property with respect to which such individual is the transferor."
10 Del. C. § 341 (checked October 21, 2026): "The Court of Chancery shall have jurisdiction to hear and determine all matters and causes in equity."
10 Del. C. § 342 (checked October 21, 2026): "The Court of Chancery shall not have jurisdiction to determine any matter wherein sufficient remedy may be had by common law, or statute, before any other court or jurisdiction of this State."
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