What is a life insurance trust?

A life insurance trust is an estate planning tool used in the state of Washington that lets you keep control over your life insurance policy after you pass away. The trust, which is established and managed by the estate executor, stores the policy and pays out the benefits to beneficiaries according to your wishes. This type of trust is beneficial because it lets you designate beneficiaries, set up tax savings, and avoid probate, which is a court-supervised process of distributing assets. The life insurance trust also ensures that your life insurance policy remains separate from your other assets. This means that should you need to use money from your estate for medical or other expenses, the benefits from the policy won’t be touched. Depending on the policy, the trust can also help in receiving the most favorable tax treatment for the insurance payout. It’s important to note that setting up a life insurance trust can be complex, so it’s best to work with an experienced estate attorney who understands the laws of the state of Washington. They can ensure that your trust is established and managed properly, so that it makes the most of your policy and ensures that your wishes are followed after you pass away.

Related FAQs

How do I transfer a business after I die?
What is a charitable remainder trust and how does it work?
What is a pour-over will and how does it work?
What is the difference between a will and a trust?
What is a durable financial power of attorney?
How can I protect my business interests after my death?
How can I reduce the estate tax burden?
What is a durable power of attorney?
What is a special needs trust and how does it work?
Is estate planning expensive?

What is a life insurance trust?

Related FAQs

Related Blog Posts