Anyone who is not the insured, the insured's spouse, or beneficiary to the trust. This would be a close friend or family member if the insured feels that this close friend or family member can be trusted.
Alternatively, the insured could use professional trustee services found at any Trust company.
Additionally, many attorneys will act as trustee for trusts that are drafted.
Most of the time, there is a fee paid to the trustee in these last two examples for the services rendered.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
Many family members and professional associates are eligible.
Interestingly, I find that the majority of my clients designate a brother or sister as the trustee.
That makes sense. After all, people tend to trust a close family member on life-and-death issues. When the insured is no longer around, a trustworthy soul is needed to handle the money. And also to take care of surviving family members. Siblings fit the bill.
But it must be emphasized that trustees have a huge responsibility with regards to the policy inside the trust. They really need to make sure that it is audited on a regular basis to confirm it is performing as expected.
You know how people sometimes lose track of their life insurance? How sometimes it doesn’t perform according to projections, and additional premium payments are needed? Or it runs out of cash sooner than expected? Or the death benefit gets reduced?
Well, if you are the trustee of your brother or sister’s life insurance trust, you don’t want any of this to happen. You very well could be liable. The insured set up the trust with a strategy designed to provide a certain amount of cash to certain people at certain times. Your job is to make sure the train arrives on schedule.
If, for whatever reason, that policy under-performs, the buck could very well stop with you. You do not want that hot potato, both for financial as well as family reasons.
You don’t want to let the people down whom your sibling trusted you to help.
So, if you are the trustee, make sure that policy is audited on a yearly basis, and make any changes that are necessary.
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Alternatively, the insured could use professional trustee services found at any Trust company.
Additionally, many attorneys will act as trustee for trusts that are drafted.
Most of the time, there is a fee paid to the trustee in these last two examples for the services rendered.
Interestingly, I find that the majority of my clients designate a brother or sister as the trustee.
That makes sense. After all, people tend to trust a close family member on life-and-death issues. When the insured is no longer around, a trustworthy soul is needed to handle the money. And also to take care of surviving family members. Siblings fit the bill.
But it must be emphasized that trustees have a huge responsibility with regards to the policy inside the trust. They really need to make sure that it is audited on a regular basis to confirm it is performing as expected.
You know how people sometimes lose track of their life insurance? How sometimes it doesn’t perform according to projections, and additional premium payments are needed? Or it runs out of cash sooner than expected? Or the death benefit gets reduced?
Well, if you are the trustee of your brother or sister’s life insurance trust, you don’t want any of this to happen. You very well could be liable. The insured set up the trust with a strategy designed to provide a certain amount of cash to certain people at certain times. Your job is to make sure the train arrives on schedule.
If, for whatever reason, that policy under-performs, the buck could very well stop with you. You do not want that hot potato, both for financial as well as family reasons.
You don’t want to let the people down whom your sibling trusted you to help.
So, if you are the trustee, make sure that policy is audited on a yearly basis, and make any changes that are necessary.