Legal Question in Wills and Trusts in Texas
who should the owner and beneficiary be of our life insurance?
My husband and I have a living trust. We are purchasing life insurance policies. I understand that if we are each others beneficiaries, we would avoid estate taxes if only one of us dies. Suppose we both die. Should our trust be the owner of the policies or since it is revocable would that be considered our estate for tax purposes? Should we form an irrevocable life insurance trust as the policy owner before we buy it? Would the revocable trust be the beneficiary? HELP! There are tax and probate issues we are trying to avoid and I have to make a decision tomorrow! If we form an irrevocable trust with someone else as trustee, how do we pay for the policy? Thanks!
1 Answer from Attorneys
Re: who should the owner and beneficiary be of our life insurance?
This is an extremely complicated issue and cannot be answered completely here. Generally, if your combined estate is large enough so that you would be liable for estate taxes, an ILT should be considered.
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