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Ilit

Draft Irrevocable Life Insurance Trusts in Minutes

12 minutes with CaseMark

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2. Upload the files you want analyzed.

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Overview

CaseMark's ILIT drafting skill generates comprehensive Irrevocable Life Insurance Trusts that comply with IRC § 2042 and applicable state trust laws. The AI produces complete trust documents covering Crummey withdrawal rights, trustee powers and succession, beneficiary distributions, policy transfer provisions, and proper execution formalities — all tailored to the client's specific circumstances and jurisdiction.

Drafting an Irrevocable Life Insurance Trust requires meticulous attention to IRC § 2042 compliance, Crummey withdrawal mechanics, trustee power limitations, and state-specific execution requirements. A single drafting error — such as inadvertently granting the grantor an incident of ownership — can cause the entire life insurance proceeds to be included in the taxable estate, defeating the trust's purpose entirely.

CaseMark's AI-powered ILIT drafting skill automates the creation of fully compliant Irrevocable Life Insurance Trusts by systematically addressing every critical provision — from irrevocability declarations and incident-of-ownership exclusions to Crummey powers and § 2035 lookback documentation. The result is a comprehensive, jurisdiction-specific trust document ready for attorney review and client execution.

How it works

  1. 1. Upload client intake details, policy information, and existing estate plan documents

  2. 2. AI drafts a comprehensive ILIT with IRC § 2042 compliance, Crummey powers, and state-specific provisions

  3. 3. Review and customize trustee powers, distribution terms, and beneficiary designations

  4. 4. Export the finalized trust document in your preferred format (DOCX, PDF)

What you get

  • Declaration of Trust & Irrevocability Provisions

  • Parties, Trustee Powers & Succession

  • Trust Property, Policy Transfer & Assignment Schedule

  • Crummey Withdrawal Rights & Notice Procedures

  • Beneficiary Distribution Provisions

  • Administrative Powers & Tax Provisions

  • Execution Formalities & Signature Blocks

What it handles

  • IRC § 2042-compliant trust language excluding life insurance from the taxable estate

  • Crummey withdrawal rights with proper notice provisions for annual gift tax exclusions

  • Comprehensive trustee powers, succession, and fiduciary duty provisions

  • Beneficiary distribution schedules with minor sub-trust termination provisions

  • Policy transfer and assignment language with § 2035 three-year rule documentation

  • State-specific execution formalities including witness and notarization requirements

Required documents

  • Client Intake Form

    Grantor details, trustee designations, beneficiary information, domicile state, and funding plan

    .pdf, .docx

  • Life Insurance Policy Information

    Policy declarations pages or summaries including carrier, policy numbers, face amounts, insured, and current ownership details

    .pdf, .docx

Supporting documents

  • Existing Estate Plan Documents

    Current will, revocable trust, or other ILITs for coordination purposes

    .pdf, .docx

  • Prior ILIT or Trust Templates

    Firm-preferred templates or prior ILIT drafts to guide formatting and style preferences

    .pdf, .docx

Why teams use it

Eliminate hours of manual drafting with AI that produces IRC § 2042-compliant trust documents in minutes

Reduce compliance risk with built-in safeguards against grantor incidents of ownership and retained powers

Ensure proper Crummey notice and withdrawal provisions to preserve annual gift tax exclusions

Coordinate seamlessly with existing estate plans to avoid conflicts and maximize tax efficiency

Questions

How does CaseMark ensure IRC § 2042 compliance?

CaseMark's AI drafts explicit language surrendering all incidents of ownership, prevents the grantor from serving as trustee, and eliminates retained powers under IRC §§ 2036, 2038, and 2042. Every provision is structured to keep life insurance proceeds outside the grantor's taxable estate.

Does the ILIT include Crummey withdrawal rights?

Yes. CaseMark generates complete Crummey withdrawal provisions including beneficiary notice requirements, withdrawal periods, lapse limitations tied to the 5-and-5 power, and hanging power provisions to preserve annual gift tax exclusions under IRC § 2503(b).

How does the trust handle the three-year lookback rule?

CaseMark prominently documents policy transfer dates and includes advisory language regarding the IRC § 2035 three-year rule. For new policies, the trust is structured so it applies for and owns the policy from inception, avoiding the lookback entirely.

Can I customize the trust for my state's requirements?

Absolutely. CaseMark tailors execution formalities, witness and notarization requirements, and trust situs provisions to your specified jurisdiction. You can further customize trustee powers and distribution terms during the review stage.

Does CaseMark handle both new policies and existing policy transfers?

Yes. The AI generates appropriate language for both scenarios — full assignment and transfer provisions for existing policies, and application-and-ownership language for new policies the trust will acquire ab initio.

Can the ILIT coordinate with the client's existing estate plan?

CaseMark analyzes uploaded estate plan documents to ensure the ILIT coordinates properly with existing wills, revocable trusts, and other planning instruments, avoiding conflicts in beneficiary designations and distribution schemes.

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