trust fund insurance

[ez]

my kids will be getting trust funds from an estate and they are taking money out of them for insurance, in my sons case almost 10%. Can anyone explain to me what this is for, thanks so much.

 

[sparklynails23]

Sounds like a scam. If the fund manager needs insurance against losses, he isn't investing it soundly. If he needs insurance against theft, that's not very comforting, either. Why not ask?

 

[sparklynails23]

Are they premium payments on a life insurance trust?

 

[A_Princess'_Daddy]

Is the grantor (the person who established the trust) still living, or are they deceased? Are you currently receiving statements as to the trust's assets, and does it own any life insurance policies on the grantor?

It could be premium payments on the life insurance policy held inside an irrevocable life insurace trust (you'll commonly hear them referred to as ILITs), which enables the proceeds from life insurance to pass to the beneficiary free of estate taxes, or it could be something else. The something else could be something nefarious (such as a fraudulent fee) or just another kind of trust (for example, if the trust owns property, it could be property insurance).

If your children are the irrevocable beneficiaries, or even if they are not, you can certainly call the trustee and inquire.