February 3, 2016

Life Insurance Trusts: Are you fulfilling your fiduciary obligations as Trustee?

Life Insurance Trusts, including Irrevocable Life Insurance Trusts (“ILITs”), can be effective and suitable financial planning and estate planning tools in certain situations.  However, these trusts come with specific fiduciary obligations for the Trustee or Trustees overseeing the trust.

Among the fiduciary duties thrust upon the Trustee is ongoing monitoring of the trust’s assets (in this case, life insurance policies) and due diligence review of the issuing life insurance companies.  Pursuant to Title 12 of the Code of Federal Regulations
, National Banks acting as Trustee are required to perform (1) a pre-acceptance review before accepting a trust asset; (2) an initial post-acceptance review to determine if the trust asset is suitable for the trust; and (3) an ongoing annual review to determine if the trust assets remain suitable for the trust.

If you serve as the Trustee of a life insurance trust, are you fulfilling your fiduciary obligations? 

As a licensed Life and Disability Insurance Analyst, I provide consulting life insurance policy and insurance company due diligence review services to Trustees of life insurance trusts, as well as Expert Witness Services for related life insurance matters.   Please contact me if you have questions about these services.

For more information, visit Fouts Financial Group.

Mary Rae Fouts

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Thanks for sharing your comments here! Mary Rae Fouts