When you’re going through the estate planning process, you may look into what’s called a life insurance trust. With this kind of trust, you could protect your assets and ensure your wishes are fulfilled.
Here’s some more information on life insurance trusts so you can decide if you want to include them in your estate plan.
What Is a Life Insurance Trust?
A life insurance trust is a trust that will own your life insurance policy. When you pass away, the insurance benefit is paid out to your trust. The trustee will use the money to pay bills like legal fees and estate taxes and then give the rest to your trust’s designated beneficiaries.
Why Use a Life Insurance Trust?
There are a few reasons why you may want to use a life insurance trust. The number one reason people create it is so they have more control over their finances. Let’s say your spouse is the beneficiary but they go into a coma after you pass away. If you have a trust, then the trust is the beneficiary and the trustee can utilize the proceeds to pay for your spouse’s care without the court getting involved.
Additionally, you can avoid going through probate, reduce your estate taxes, and ensure that cash is immediately available to pay your bills. You can also avoid having to pay income and estate taxes.
Before you decide whether or not to use a life insurance trust, it’s critical to get in touch with an experienced estate planning attorney to make the best decision for you and your family.
Contacting Legacy Law Group
If you need help creating a life insurance trust, you can contact the estate planning attorneys at Legacy Law Group in Eastern Washington, Spokane Valley, and Spokane itself. Get in touch with us at (509) 315-8087.