Who should I pick as the trustee of my irrevocable
life insurance trust?
When you're deciding whom to name as the trustee of
your irrevocable life insurance trust, you should automatically
scratch both your name and the name of your spouse from the list.
According to "Wealth Enhancement and Preservation" (The
Institute Inc., Denver, Colo.), "It is very clear under tax law
that you should not be the trustee of an irrevocable life insurance
trust that you set up. The trustee probably should not be your spouse
either. Many planners suggest that a good trustee for an irrevocable
life insurance trust might be the local bank trust department. Bank
trust departments deal with irrevocable trusts on a regular basis, as
do accountants. Because of the technical nature involved in the
administration of an irrevocable life insurance trust, it may not be
a good idea to use individuals as your trustees unless they are
extremely well versed and competent to handle the technicalities involved."