Irrevocable Life Insurance Trusts in Lehi, Utah

If you live in Lehi, there’s a good chance your net worth is growing faster than you expected. Many families here have wealth in company stock or options, a house in Traverse Mountain or Alpine, and a life insurance policy big enough to protect everyone at home. Put those together and estate planning stops being something for later. An irrevocable life insurance trust, or ILIT, is one tool that can keep a death benefit out of your taxable estate and place it under the care of a trustee you choose.

This page focuses on what is different about Utah. For the full explanation of how these trusts work, read our irrevocable life insurance trust guide. Western Pacific Insurance is an insurance agency, not a law firm. A Utah estate planning attorney drafts the trust, and we help you design and place the policy the trust owns. Nothing here is legal or tax advice.

Utah does not have a state estate tax

According to the Utah State Tax Commission, Utah’s old inheritance tax was tied to a federal credit that ended after 2004, so the state no longer collects an estate tax. The tax Lehi families need to think about is the federal estate tax. The IRS sets the 2026 federal basic exclusion amount at $15,000,000 per person, and married couples can often protect up to $30,000,000 by using portability.

Most families are well under that number. The exception is founders and early employees. If private company stock takes off, an estate can pass the limit faster than you might guess, and a life insurance policy you own yourself counts toward the total.

Utah is not a community property state

Nevada, Arizona, and California treat much of what a married couple earns as jointly owned. Utah generally does not. Property is usually treated according to whose name is on the title. In practice, this often makes it easier to move an existing policy into an ILIT or to make gifts that pay the premiums, since the insured spouse commonly owns the policy alone. If you lived in a community property state before moving to Utah, tell your attorney. Property you acquired there may still be treated as community property.

Utah trust law and long-lasting trusts

Utah trusts fall under the Utah Uniform Trust Code, found in Title 75, Chapter 7 of the Utah Code. Utah is also friendly to trusts that last for generations. Under Utah Code 75-2-1203, interests in a trust can remain valid for up to 1,000 years. If you want an ILIT to hold and manage money for your children and grandchildren, that flexibility can be a real benefit. Your attorney can also explain how the trust works alongside the federal generation-skipping transfer tax exemption, which the IRS lists at $15,000,000 for 2026.

Large families and Crummey notices

Most ILITs pay their premiums with yearly gifts you make to the trust. To qualify those gifts for the federal annual exclusion, which the IRS lists at $19,000 per recipient for 2026, each beneficiary receives a brief right to withdraw their share, along with a written notice called a Crummey notice. Each beneficiary with that right can count as a separate recipient, so a larger family can often cover more premium with gifts that stay within the annual exclusion. The tradeoff is paperwork. More beneficiaries means more notices to send and keep track of every year, so choose a trustee who is organized and dependable.

New policy or existing policy

If you transfer a policy you already own into the trust, federal law pulls the death benefit back into your estate if you die within three years of the transfer. If the trust applies for and owns a new policy from day one, that three-year rule generally does not apply. If you are young and healthy, having the trust apply for new coverage is often a practical route, though every application goes through full underwriting. To get a sense of the right amount, start with how much life insurance Lehi families need.

Founders and business owners

If you own part of a startup or a family business, you may also need coverage tied to a buy-sell agreement or a key employee. Those policies are normally owned by the company or by your business partners, not by your ILIT. Our guide to key person and buy-sell life insurance shows how the pieces fit together. And if your home or cabin sits in a revocable trust, take a look at Utah trust homeowners insurance too.

Questions for your Lehi attorney and agent

• If our company equity keeps growing, could our estate go over the federal exemption?
• Should the trust buy a new policy, and is term or permanent coverage the better fit?
• How many beneficiaries will get Crummey notices, and who will be responsible for sending them?
• Did we ever live in a community property state, and does that change how our policies should be handled?

Talk to us about Lehi

Western Pacific Insurance works with families across Utah, Nevada, Arizona, and California. We also have local pages for Henderson, Phoenix, and San Diego. For the basics of coverage in your area, see our Lehi life insurance page and our individual life insurance overview. Bring a summary of your current policies and your attorney’s contact information, then call 702-932-3105 or request a quote online.