What is a life insurance trust?

A life insurance trust is a form of estate planning law in Florida that allows one to use a trust fund to leave a life insurance policy to a beneficiary. This trust allows the policyholder to control the distribution of the policy’s proceeds, as well as the conditions under which they must be paid. The beneficiary named in the trust will not be subject to the delays or legal requirements of probate court. In setting up a life insurance trust, the policyholder names a trustee to manage the trust fund and act according to the terms of the trust. The trust can be used to pay taxes, cover final expenses, provide for ongoing support of children or grandchildren, or leave an inheritance. The trust document will specify when and how the trust will be distributed. Usually, the proceeds are distributed when the policyholder dies. The life insurance trust also serves as a great way to provide financial security for children or descendants. As the trust document dictates, the trustee can hold and manage the proceeds for the benefit of the named beneficiary and may be able to further the policyholder’s philanthropic goals. The trust is also an effective tool for estate planning as it allows the policyholder to bequeath their assets with minimal taxes.

Related FAQs

What is an estate inventory and why should I create one?
What is a guardianship and why should I consider it?
Should I include a trust or will in my estate plan?
How can I ensure that my wishes are carried out after my death?
What is an estate tax return and why should I file one?
How can I protect my family's inheritance from creditors?
Who should be included in an estate plan?
What is an inheritance trust?
How do I set up a living trust?
How can I reduce the estate tax burden?

What is a life insurance trust?

Related FAQs

Related Blog Posts