Insurance Trust

An irrevocable trust set up by a policyholder in which he/she places his/her life insurance policy. This removes the policy from the policyholder's estate, shielding it from estate taxes. Importantly, the insurance trust must be set up at least three years prior to the death of the policyholder in order to exclude it from the estate. One might set up an insurance trust in order to set aside cash to pay estate taxes otherwise owed, or to provide for the policy's beneficiaries without concern for the tax. Normally, one sets up an insurance trust when one expects to have an estate worth more than the maximum exclusion figure. It is also called an irrevocable life insurance trust.

Insurance trust.

You set up an insurance trust to own a life insurance policy on your life. When you die, the face value of the policy is paid to the trust.

That keeps the insurance payment out of your estate, while making money available to the beneficiary of the trust to pay any estate tax that may be due, or to use for any other purpose.

If you're married, you may set up an insurance trust to buy a second-to-die policy, which pays the face value of the policy at the death of the second spouse. That allows the first to die to leave all assets to the other, postponing potential estate tax until the survivor dies. At that point, the insurance benefit is available to pay any tax that might be due.

References in periodicals archive

Crisis rocked the planned inauguration of the board of Nigeria Social Insurance Trust Fund (NSITF) on Thursday, as the Minister of Labour and Employment, Dr.

Ngige Absent As Crisis Mars NSITF Board Inauguration

The National Insurance Trust Fund has deployed 12 teams to estimate the damages to grant insurance compensations for the victims, state radio reported.

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The lawyers' fees will be covered by the Public Universities Risk Management and Insurance Trust, with "excess coverage" provided by a United Educators policy the university holds, UO spokesman Tobin Klinger said in an email.

UO must pay legal costs for ex-officer

Imagine you're the trustee of an irrevocable life insurance trust and you receive a notice from the carrier that the trust's 85 million death benefit policy is going to lapse in 12 months, the insured is 82 years old and the premiums paid to date exceeds 81 million.

Policy payoff: practical steps to reviewing existing life insurance

Auditors first uncovered a deficit in fiscal 2013 in the millions, much attributed to annual underfunding of the town's health insurance trust fund.

School board seeks monitoring of town finances; Asks state DOR to guide climb out of steep deficit canyon

The business in these trusts will reimburse the Board for the cost of these 'assumption of liability policies' over ten years, at low interest rates" continued Azzopardi, adding: "By December 31, 2013, the Board will finalize the insurance policy purchase on behalf of the two largest defaulted group trusts, the Healthcare Industry Trust of New York and the Healthcare Providers Self Insurance Trust. Additional proceeds can purchase insurance policies for group trusts that refused to meet their claim obligations and whose claims the Board now administers.

NY state bond issue to cover WC Trust claims

The bank's majority shareholder, Social Security and National Insurance Trust (SSNIT), has finally chosen a buyer, Fortiz, which was one of the three companies short listed a couple of months ago as likely candidates to take over the bank.

-Sale of Merchant Bank reaching final stages