Trusts & Insurable Interest

[Hillel]

What is the name of your state? NY

If I buy a Life insurance policy I could make anybody in the world my beneficiary (Fact). Only the owner needs to be an Insurable interest. My question is if I am the creator & the settlor of a trust & trust has as the beneficiary a non insurable interest. Could this trust buy a policy on myself & be the owner beneficiary of my life insurance policy? Does this trust have an insurable interest because I am the settlor so it is as if I am buying th policy? Or the trust has no insurable interest & can not buy the policy?

Please let me know where you are getting your information.

 

[ALawyer]

In large estates, where tax planning is essential, trust owned life insuarance is commonplace. Insurable interest is not an issue to worry about. Any competent insurance broker or underwriter can deal with it -- they do it every day. BUT get a competent lawyer to draft the trust as irrevocable life insurance trusts are IRREVOCABLE!