Who Can Be a Trustee for Life Insurance?

A trustee of life insurance is any person or company that comes into possession of the life insurance policy held in trust, and is responsible for its administration and distribution in accordance with terms predetermined by the grantor. The trustee bears a fiduciary duty to act in the best interest of the beneficiaries. Therefore, it is very important to select the right trustee. The trustee may be:

A Family Member or Friend: Many appoint a close, trusted family member or friend. In this case, the directness of trust might be ideal if the needs of the family are to be directly known. However, one must ensure such a person chosen to do the work is actually capable of handling all the legal and financial responsibilities emanating from the position.

A Professional Trustee: Since a professional trustee-for instance, an attorney, accountant, or trust company-can add sophistication in the management of complex financial and legal problems, this might be advisable. A professional trustee brings neutrality and objectivity to that process, making them a suitable choice where larger estates are involved, or in situations when family members lack the skill set required for such an enormous task.

A Corporate Trustee: Most people prefer to utilize a corporate trustee that includes a trust company or some financial institution. It is because corporate trustees have vast experience in handling trusts and keeping them within the legal boundaries thus offering long-term stability with experience.

Conclusion: Selection of appropriate trustee holds the key for making the life insurance policy function smoothly and distributed in accordance with the wishes of the grantor.

One Pacific Trust specializes in providing professional trustee services, offering the experience and reliability needed to ensure that life insurance trusts are managed properly and in full compliance with legal obligations.