Life Insurance Trustee Risk ManagementHelping guide institutional trustees of ILITs through the minefields
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Life Insurance Trustee Risk ManagementHelping guide institutional trustees of ILITs through the minefields
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Since when is an institutional trustee less responsible for the performance (or under-performance) of life insurance policies in a trust than they are for other financial assets that are poorly managed? Never. Recent case law protects the trustee who takes precautionary steps. But it needs to take those steps and they have to be the right ones. To date it seems that trustees rely on, at most, an insurance agent annually telling them that the policy is still in force and ask no further questions for another year. Are they prepared when the insurance company suffers a downgrading? Do they know if the policy can be replaced by a more financially efficient policy? Are they prepared to answer the question about whether there is still a need for that $20 million policy and what's the best way to unwind a split-dollar arrangement? Would it be more prudent to sell the policy to third party investors? Flaster Greenberg PC will work with institutional trustees to make sure that they do not step on the landmines surrounding them that they never knew were there.
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See also: Captive Insurance Companies |
David S. Neufeld, Shareholder, Flaster Greenberg PC
1810 Chapel Avenue West | Cherry Hill, NJ 08002 856.382.2257 | david.neufeld@flastergreenberg.com Internationally Recognized Tax and Estate Planning Attorney |