Not all trusts operate during your lifetime — some are designed to take effect thereafter. Though such trusts do not offer you life-long protection in the event of illness or incapacity, they do allow you to:

• Take advantage of estate tax reduction strategies
• Modify your plans as circumstances require
• Enjoy the comfort of knowing that your final wishes will be executed faithfully and with compassion

Life Insurance Trusts
A Life Insurance Trust is a simple yet effective estate planning tool. First, you name the trust as beneficiary of your life insurance policies. Then, upon your death, your trustee collects policy proceeds, invests them prudently, and distributes the income and principal according to your trust agreement.

There is flexibility in a life insurance trust. Many traditional insurance policies limit your number of beneficiaries. But, if you direct the proceeds into a trust, you then can channel your distributions to any number of different beneficiaries and provide for future generations.

By placing your life insurance in trust, you ensure that there is no time lag between collection and investment of proceeds — funds will go to work immediately for your beneficiaries. And, you spare your beneficiaries the anxiety of handling large sums at a time when they may be unable to cope with major decisions.

When a life insurance trust is properly structured and managed, proceeds of the policies held in the trust may not be subject to estate tax or probate. Thus, the trust can create liquidity for settlement expenses and estate taxes.

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