The purpose of an Irrevocable Life Insurance Trust is to own one or more life insurance policies insuring the life (or lives) of the individual (or married couple) establishing the trust. The proceeds of the policy will be available to provide such liquidity as may be necessary to pay estate taxes. Owning the policy in trust, rather than outright, prevents the policy proceeds from being subject to estate taxes in the estate of the insured. Rather than paying the annual insurance premium(s) outright, the individual or couple would instead transfer money to a Trustee, as a "gift" to the trust, made in such a way as to be eligible for the annual gift tax exclusion. The Trustee is specifically directed to notify the beneficiaries of the trust when such gifts have been made, and the beneficiaries are given an opportunity to withdraw the gift (though it is typically not anticipated that any of the beneficiaries would exercise this right, as it would take away funds to pay the premiums), before the gifted funds are used to pay the insurance premiums.