Planning for Disabled Beneficiaries Using Life Insurance Trusts

Other

2019-06-11

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Abstract

A life insurance trust can be a useful tool when planning to provide support to a family member living with a disability. The life insurance trust may have certain advantages if it is structured as a “Henson trust” designed to preserve entitlements to government income-tested benefits and/or a “qualified disability trust” (“QDT”). In addition, the preferred beneficiary election an provide significant tax advantages in certain situations. A review of various situations in which a life insurance trust can be of value, and some applicable tax elections and implications, will be provided.



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