Estate inclusion of life insurance addresses whether death proceeds are counted in the insured's taxable estate. Proceeds are included if the insured owned the policy, retained incidents of ownership, or transferred the policy within three years of death. Ownership by an irrevocable life insurance trust (ILIT) can avoid inclusion if established and funded properly in advance.

Producers move personally owned policies to an ILIT when appropriate, allowing proceeds to bypass the estate. Timing matters: transfers within three years may still be included. Advisors coordinate gift funding and Crummey notices to keep ownership and premium flows compliant.