A life insurance policy can be a great way to care for your family members if you were to pass away. It can also be a way to simply leave them more assets after an expected passing. Many people will do their estate planning around their life insurance policy.
You may want to have more control over what happens to the money than you would get if the beneficiaries simply received that money when you passed away. You know that you can gain control over how it is used by putting it into a trust and then giving the trustee specific orders for how to administer that money. But is it possible to have a life insurance policy pay out to a trust instead of an individual beneficiary?
You can certainly fund a trust with a life insurance policy
The short answer is that yes, you can select your trust as a life insurance beneficiary. Just make sure that it’s very clear that the money is to pay into the trust and not to any member of your family. This will also keep it from simply entering your estate.
Once the trust has been funded with the life insurance policy, then the trustee has full control. They can decide how to use it based on your wishes. For instance, many people create trusts to pay for the costs of education and college tuition for their grandchildren. You could also put money aside to be used to buy a home, start a business or even retire. You get to decide how you think the money would best benefit your family.
Naturally, you want to make sure that you set all of this up perfectly so that it goes without a hitch. Be sure you know what steps to take.