Atlanta Estate Planning, Wills & Probate | Siedentopf Law

Putting Life Insurance in Your Trust

I’ve set up my trust. Now what do I do with my life insurance? I’m Sarah Siedentopf, I’m an estate planning and probate attorney in Atlanta, Georgia. And this is a question I get a lot.

Now that I’ve got my trust set up, and for this question, we’re gonna say it’s a revocable grantor trust that you are the beneficiary of during your lifetime, and then your children, friends, favorite charity, you know? Whoever you’ve chosen is the beneficiary after your passing.

So now that you’ve set up this trust, you probably already had life insurance in place, or maybe you, you know, are just getting some while you’re thinking about it, what do you do with it in regard to your trust? And this is very much up to you, situation dependent.

If you have minor children, we want to make the trust a beneficiary of your life insurance, because we do not want if you’ve gone to all the trouble of creating a trust and trustees, and doing all this estate planning, we do not want minor children to accidentally inherit outright, have to go to court to get a conservator, all of that stuff. This is, the planning that you’re doing is to avoid this. So we don’t wanna miss that beneficiary designation.

On the other hand, if you say, “I don’t need the trust to manage it, I don’t need the trustee to be over, it’s totally fine if my kids, or you know, whoever I’m choosing gets it right away it’s perfectly fine to have them as the beneficiary. So a most common suggestion that I have for people is, you know, often spouse is your first choice beneficiary, stays your first choice beneficiary. You say, if you know my spouse outlives me, I want them to get the money, and decide what to do with it. And then the trust being the second line beneficiary.

But again, in situations where you have older children, responsible people, it’s completely fine as long as it works with the rest of your planning to have it be still, you know, spouse and then kids. It doesn’t have to be connected to the trust if that doesn’t forward your goals because life insurance automatically passes to whoever’s in the beneficiary designation category.

So really the only huge mistake you can make is not having someone named, because if we run out of, you know either we never filled out the paperwork, or everyone has passed away, then it’s going to your estate, in which case it’s going through probate, and you set up a trust, you didn’t want this. So accidentally having it go to your estate, or accidentally having it go to minor children are, you know, the two biggest issues.

Other than that, as long as you’ve thought it through, and you know, have a plan, you’re usually good to go. If you’ve got more questions, wanna talk to me about your specific situation I would love to hear from you. Also, please like and subscribe. Thank you.

Whether you’re in the Atlanta and Brookhaven areas, or in Cobb, DeKalb , Fulton, Gwinnett, or another county in metro Atlanta, we can help you. We can also work with executors by phone or video conference if they are out of state or far away. Only after listening carefully will we present the options that are right for you and explore the benefits and costs of each one. 

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