Total Alignment™ Trust-Owned Life Insurance Audits

Industry Expertise without Industry Conflicts.

Over the past few years, the number of trusts created to own life insurance has skyrocketed. Use of such irrevocable life insurance trusts (ILITs) is now among one of the most common wealth transfer techniques. Yet, due in part to this increase in usage, the scrutiny placed on those who agree to serve as trustee of such trusts has also increased. As a result, trustees of trusts owning life insurance are increasingly becoming subject to liability due to criticisms by the beneficiaries of such trusts that the trustee’s decision to retain such policy (which often represents a significant future asset of the trust) was improper. Thus, trustees are now seeking ways to minimize their liability on such matters.

The Trust-Owned Life Insurance (TOLI) Audit Process

Upon receipt of the applicable trust agreement, insurance information and engagement documents, a legally-trained CERTIFIED FINANCIAL PLANNER™ practitioner on staff will review these documents and conduct further analysis. Upon completion of the analysis, a written report describing (a) what material risks exist in retaining the current policy, and (b) whether the policy should be kept, replaced or allowed to lapse without replacement. Importantly, if the recommendation is replacement, the firm is prohibited from being involved in such replacement (thereby preserving the integrity of its review).

$3,000* per trust having one life insurance policy (+ $500 per additional policy held within the trust) *No fee is payable for clients subscribing to the Total Alignment Family CFO™ service.