Many people buy insurance to protect their children’s future, but have you ever thought about what would happen if insufficient wealth planning will lead to children’s profligacy and quickly spend the large sum of insurance money they inherit after you pass away? Rather than a one-time gift, is it better to give in installments and conditional gifts?
This is where an insurance trust can help:
- Designate beneficiaries (including unborn descendants)
- Specify the distribution method and timing of insurance proceeds
- Specify the conditions that beneficiaries must meet (such as reaching a certain age or completing their education)
Unlike the typical claims process for insurance policies, the settlor can flexibly arrange the trust distribution method according to the needs of the next generation at different stages. The insurance proceeds are paid directly to the insurance trust and become trust assets. The trustee distributes them to the beneficiaries according to the trust agreement, making the most appropriate arrangements for them. This arrangement can meet your needs flexibly and ensure that you don’t have to worry about your descendants’ financial management skills.
If you want to learn more about insurance trusts,
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