How Does A Life Insurance Trust Work? 
Life insurance does not need a specific life insurance trust to be the life insurance owner and/or beneficiary but it can provide some additional flexibility in planning . The decision to engage an experienced estate planning attorney to utilize a life insurance trust is usually reserved for more complex situations where the set up and maintenance costs can be justified . While there are many different types of trusts , an irrevocable life insurance trust is a trust with the primary purpose of owning a life insurance policy in order to remove life insurance proceeds from the taxable estate and , as a result , avoid paying estate taxes on those proceeds . 