Friday, February 1, 2013

The Simple Life Insurance Trust

For clients who have relatively limited assets, but who have a life insurance policy and wish to ensure that the proceeds will be held and managed by a trusted person (often a relative) while their children are young, we can prepare a simple trust document that will govern the use of the proceeds. Using this document, the trustee can be named as beneficiary of the policy, and can invest the proceeds for the benefit of the client’s children. The trust directs that income is paid to a child over a certain age (such as 18), and that the principal is paid to him or her at a specified age (30 or 35).

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