Switching ILITs

Wealth Strategies Journal:  “Irrevocable life insurance trusts (‘ILITs’) are commonly used to keep insurance proceeds outside the estates of the grantor-insured, the grantor’s spouse, and the grantor’s descendants (if a generation-skipping trust is used). As the name indicates, an ILIT is irrevocable and its terms cannot be amended after it is created. The irrevocability of an ILIT can create problems for grantors and their attorneys alike. For example, perhaps the ILIT is not a generation-skipping trust and the grantor now wishes to leverage his/her GST exemption with the policy or policies owned by the trust. Or maybe the grantor no longer wishes to provide for one or more of the beneficiaries of the ILIT, or desires to change the dispositive terms of the trust. So what can the grantor of an ILIT do if he/she is no longer happy with the terms of an ILIT?”