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Trusts & Life Insurance Proceeds?
Can a testamentary trust receive life insurance proceeds?
Yes, a testamentary trust can receive life insurance proceeds.
If you want to give beneficiaries the option to inherit life insurance proceeds into a testamentary trust you would need to ensure that your life insurance is made payable to 'the estate'.
You could speak to your insurer or super fund about this, and most companies allow customers to update this online.
To allow your beneficiaries to receive life insurance proceeds in a testamentary trust you would need to have relied on a Will that includes the required testamentary trust terms and provisions.
Wills from Will Wizard include a recommendation to beneficiaries to seek independent legal and financial advice before deciding how to receive their inheritance.
Should I make life insurance proceeds payable to the estate?
If you want your life insurance proceeds to form part of your estate then you will need to make your life insurance proceeds payable to the estate. If you relying on a Will that provides beneficiaries with the option to inherit via a testamentary trust, then these life insurance proceeds would then also enjoy the tax minimisation and asset protection advantages of testamentary trusts.
Wills from Will Wizard include a recommendation to beneficiaries to seek independent legal and financial advice before deciding how to receive their inheritance.
