TRUST ASSET CONSULTANTS | 1121 Olivette Executive Parkway, Ste 200 | St. Louis, MO| 63132
Trust Asset Consultants
Grantors and Beneficiaries How can an insurance trust beneficiary confirm that a trustee is ‘doing the right thing’?  A trustee’s basic fiduciary duty is to maximize the probability of a favorable outcome to the trust estate. To assure trust objectives are understood and effectively implemented, a grantor is well-advised to provide the trustee with a ‘Grantor Direction Letter’ and assist formalization of a TOLI Investment Policy Statement (TIPS). Unless otherwise agreed, beneficiaries may reasonably assume, at the time the trust policy is accepted and at all times during which the trustee maintains management control, the trustee has determined (1) scheduled premiums are adequate to sustain the policy for the insured’s lifetime, and (2) the product and underwriting carrier are suitable to successfully achieve the trust’s objectives as dictated by the governing document, TOLI Investment Policy Statement, and trustee’s risk management procedures. An insurance trust beneficiary should annually request: A copy of the trust’s current TOLI Investment Policy Statement. The most recent actuarially certified premium adequacy evaluation. Confirmation that current policy values are performing consistent with policy acceptance benchmark values. When a family member serves as an unskilled personal trustee, beneficiaries should request affirmation of either the trustee’s life insurance and policy performance expertise or delegation arrangement of these essential asset management duties to a ‘qualified’ professional advisor or third-party provider. If a TOLI policy is significantly under-performing its acceptance benchmark values or no longer suitable for the trust’s purpose, a beneficiary should expect the trustee to communicate this problem and offer restructure recommendations. TAC counseling services and The TOLI Center policy administration and risk management services assist beneficiaries and their professional advisors in annually or periodically reviewing the life insurance policy risk management reports provided by the trustee, especially if planning objectives change and/or policy restructure is warranted to maximize the probability of a favorable outcome to the trust estate.