14. The "Pour Over" Life Insurance Trust

Planning your estate involves assuring the maximum possible security for the surviving members of the family. To do so, you must meet two goals: first, provide enough property to meet the family's future needs; and second, assure that maximum benefits are derived from the property that is provided. When viewed in this light, estate planning is brought into a simple and yet effective perspective.

Two of the most effective instruments for accomplishing the goals of estate planning can be a properly drawn trust agreement and adequate life insurance. Each item complements the other, and together they do much
toward conserving wealth and providing financial security to the family.

The "pour over" life insurance trust is designed specifically to receive the proceeds of your existing and newly issued life insurance policies. The trustee is named the beneficiary. Upon your death, the proceeds are paid to the trustee, who manages and distributes the funds according to the terms you made in the trust instrument. The trustee's
money management experience and the flexibility you provide in the trust instrument are the major advantages to this estate planning tool.

The flexibility is of particular importance if a beneficiary is an aged relative or a minor dependent. The nature and extent of the needs of this type of beneficiary are difficult to predict. The trust can provide
for a high degree of personal contact between the family and the trustee. The trustee can thoroughly acquaint himself with the specific needs of the family and lend his investing and money management experience to meet those needs.

The trust is activated at your death. Up until your death you may change the trust instrument or revoke it entirely. You may direct other assets, in addition to your life insurance, into the trust. These other assets are "poured-over" into the life insurance trust to be managed and disbursed along with the life insurance proceeds under the terms of the
trust agreement.

The life insurance trust simplifies and unifies the administration of your estate assets. This process can minimize costs associated with property management while maintaining professional and expert administration of the property. And while the provisions of a will are a matter of the public record, the publication of the terms of a trust is not required. For these special reasons, you should consider a "pour-over" life insurance trust.

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