hi anteater,
thank you for the very courteous reply.
i am pretty sure i am correct about the first statement. until there was a law passed, it was considered a full distribution (i hope i am using the correct terminology), instead of allowing it to be taxed over a period of time. that was a huge disadvantage. the reason i know this is that i went to a trust seminar where the lawyer was still saying this. i then called up farmers and merchants trust division, and found out that this was no longer true as of a year or two ago, at the time of the conversation. that conversation was over 5 years ago, so the law change was awhile back - while i was still at the infant stage of learning about trusts.
from my recall, i am of the impression that there is nothing that a beneficiary cant do from within a trust, that they could as an individual. i am certainly willing to say i am wrong, if you want to post a link. lets take a simple case. husband has an insurance policy. husband and wife have a revocable trust, with them as trustees and lifetime beneficiaries.
husband dies. i dont think there is anything that the wife cant do within the trust, that she could do if she was named as the individual beneficiary. a trust is a mighty powerful tool.
the comment about estate taxes i did not understand at all, which is why i wanted some clarification. in general there is not much that can be done to avoid estate taxes. there is such a thing as an insurance trust. but i dont think that has anything to do with what the op was asking. the question had to do with who to name as the beneficiary of one's insurance policy.
i dont want to fight with anyone here. but good debating is helpful, in that it helps arrive at a more correct conclusion.
in this case, we can take a look at what advantages there are, if there are any, to not naming a trust as the beneficiary.
as you know, i am a big fan of trusts. it is one centralized document that can be tailored very specifically to the desires of the trustor. that, in itself, is a huge reason why one's first thought should be to place everything in their trust. or in the case of pensions, iras, insurance - the beneficiary. you have one place that mentions how you want your assets managed, and by whom.
if you want to make beneficiary changes, you can do so in just the one document. although personally, as i have stated before, i dont like the idea of having amendments that change beneficiary names.
have a nice day.