Trustee and single life cover

Q: I have a single life, life insurance policy. I am the life assured and the applicant. If I write the policy in trust can I be a trustee? If no, why not?

Typically a Trust in this circumstance has someone other than the insured as the Trustee.  The principal idea is that when someone dies, the trustee handles the financial affairs of the trust so it would not make sense to have the insured as both.  Also, in this situation, it is customary that the Trust both owns the policy and is  the beneficiary, thus helping to keep the death benefit amount out of the Estate of the insured.  The good folks at the IRS look askance at tax sheltering mechanisms whereby the creator of the trust keeps control of the assets of the trust (a revocable trust), so consultation with your tax lawyer is recommended.
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DISCLAIMER: This publication is distributed with the understanding that it does not constitute legal advice or establish an attorney/client relationship by way of any information contained herein. The information provided is for general purposes only, as readers are advised to consult with a qualified lawyer regarding the specifics of their particular circumstances.

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