Rethinking Premium Funding: Putting Existing Trust Assets to Work

Yeah, thanks, Brian.

Thank you so much for having me back on the podcast.

You know, there's a lot of reasons why our clients choose to plan with trust.

And especially when we're talking about life insurance, a trust can just provide a very efficient way of holding that life insurance policy.

There may be a lot of different reasons that the client would go that route.

Maybe they're looking to remove the assets from their taxable estate.

So if they own the life insurance policy individually, it would be included in their estate for estate tax purposes versus if they put it in an irrevocable trust, it would not.

Maybe they're just looking for a way to keep assets organized, just that central control over the assets and the distribution to the beneficiaries.

Trust can provide a very efficient creditor protection mechanism.

So in a lot of states, there is additional creditor protection afforded to assets that are held inside of trust.

So it just kind of offers that additional protection wrapper there.

And finally, by putting life insurance inside of a trust, oftentimes those assets can be used to actually pay estate taxes that might be due later on.

You know, life insurance, the death benefit will provide that immediate liquidity and often the estates can be fairly illiquid.

So by swapping out those assets and making some transfers there, we can provide additional liquidity inside of the estate to pay those taxes.