Insurance Trusts


       An irrevocable life insurance trust is a trust that owns your life insurance  policies.   The policy pays the policy premiums, collects the death benefits when the insured passes away, and distributes the benefits according to the terms specified when the trust was created.

        Since this is an irrevocable trust, you can determine how you wish the benefits of the insurance trust to be distributed when you create the trust, but you may not be able to amend the terms in the future.  The purpose an insurance trust is to avoid having the death benefits from the insurance policy included in your estate. If your gross estate exceeds $675,000, the proceeds from your policy could be taxed. By transferring the policy to an insurance trust, you avoid the estate taxes since you do not own the insurance policy.  The trust is considered the legal owner of the policy.  Thus, the proceeds aren't included in your gross estate.


The proceeds of the policy not subject to estate taxes.

The trust is not subject to probate.

The provisions of the trust are confidential.


The trust is irrevocable.  Once established you cannot change the terms.

You must give up all control over the policy.  You cannot serve as trustee of the trust.

© Alex J. Llorente  2012