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The aim of an irrevocable ife insurance trust is to keep the death benefits from a life insurance policy outside of the policyholder's estate -- and thereby remove the chance that the proceeds will be subject to a federal estate tax that can reach as high as 55%. According to "Wealth Enhancement & Preservation" (The Institute Inc., Denver, Colo.), "A properly established irrevocable life insurance trust owns life insurance on the life of the trust maker, thereby keeping the life insurance proceeds outside of his or her estate and avoiding federal estate tax (federal income tax is also avoided for different reasons). An irrevocable life insurance trust keeps policy proceeds free of federal estate tax upon the death of the trust maker and also on the subsequent death of his or her spouse. "The proper use of this type of trust allows the trustees to satisfy the trust maker's estate settlement costs and death tax obligations without subjecting the insurance proceeds to those costs and taxes. By utilizing this planning vehicle, a 50% federal estate tax bracket taxpayer can purchase half as much life insurance as he or she would own personally and still get the same after-tax insurance benefit for his or her beneficiaries. Or he or she could double the amount of the coverage passing to his or her beneficiaries without paying a dime more of premium.