What is a life insurance trust?

A life insurance trust is a type of estate planning tool used to provide financial security to your family after your passing. It is an instrument created under the laws of New York that can hold a life insurance policy as part of your estate plan. This type of trust is designed to provide an income stream to your beneficiaries after your death. Although the life insurance policy belongs to you during your lifetime, when it is held in a trust, you are no longer considered the owner of the policy. This means that the life insurance proceeds are passed directly to the beneficiaries named in the trust without going through the lengthy and expensive probate process. The life insurance trust also allows you to control how and when your beneficiaries receive the death benefit. You can set up specific guidelines such as when they will receive the money, how much they will get, and what the money will be used for. Additionally, the life insurance trust can be used to provide for special needs beneficiaries, help pay for funeral costs, or establish a charitable remainder trust. Overall, a life insurance trust is an easy way to ensure your beneficiaries receive maximum financial benefit after your death, without having to go through the lengthy and expensive process of probate.

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What is a life insurance trust?

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