Trust-Owned Life Insurance - TOLI

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DEFINITION of 'Trust-Owned Life Insurance - TOLI'

Life insurance that resides inside a trust. Trust-owned life insurance is used by many high net worth individuals as the cornerstone of their estate plan. It enables the trust to provide for survivors, cover estate tax liability planning, balance inheritances among heirs and meet charitable objectives.

BREAKING DOWN 'Trust-Owned Life Insurance - TOLI'

Life insurance is viewed as a long-term asset that will not be used for its true purpose, ideally, for decades. Consequently it is often overlooked when monitoring and managing the overall trust. However, it is important that the trust-owned insurance policies be reviewed regularly. The existing policy might not meet the current needs of the trust, and newer insurance products might be more cost efficient and offer better options and features.

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RELATED FAQS
  1. What would the estate tax be on life insurance policy of $25,000?

    $25,000 was paid to the beneficiary of a life insurance policy. What would the estate tax be and do you have to pay an estate ... Read Answer >>
  2. What percentage of withdrawals from a trust fund is taxed?

    I have inherited a trust fund. This is the first time I have considered pulling money from the account.  ... Read Answer >>
  3. What should I do with my TOLI?

    I am a trustee on a Trust-Owned Life Insurance (TOLI) with a $463,000 face value. The current cash value is $83,5 ... Read Answer >>
  4. How do I list the beneficiaries of my life insurance policies if I have a trust? ...

    Because most states protect life insurance policies from creditors, most buyer questions come from the confusion created ... Read Answer >>
  5. How is maintenance of standard of living for survivors accomplished in estate planning?

    Understand what elements of an estate plan can assist in creating certainty for survivors that allows them to maintain their ... Read Answer >>
  6. What is the difference between the death benefit and cash value of an insurance policy?

    Understand the difference between the various components of a life insurance policy including the death benefit and a policy's ... Read Answer >>
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