what is the purpose of an irrevocable life insurance trust
Life insurance trust A life insurance trust is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies.[1] Upon the death of the insured, the trustee invests the insurance proceeds and administers the trust for one or more beneficiaries. If the trust owns insurance on the life of a married person, the non-insured spouse and children are often beneficiaries of the insurance trust. If the trust owns "second to die" or survivorship insurance which only pays when both spouses are deceased, only the children would be beneficiaries of the insurance trust.
Three certainties There is a requirement that the beneficiaries of a trust, known as the objects, be certain. Within express trusts this is a particularly complex area, because the test used to determine certainty varies between fixed trusts, mere powers and discretionary trusts.[24] Fixed trusts are trusts for a specific, named list of individuals, with Alastair Hudson giving the example of "Â£10,000 to be held upon trust equally for the complete team of 11 Sunderland Football Club players who started the 1992 Cup Final at Wembley". The test for fixed trusts is that the trustees must be able to give a complete list of the beneficiaries, as laid down in IRC v Broadway Cottages.[25] If there are any potential beneficiaries who the trustees are not certain of, or the trustees cannot compile a complete list, the trust is void for uncertainty.[26]