Trust-Owned Life Insurance (TOLI) Risk Management

The risk management of a TOLI policy can have many players: grantors, trustees, attorneys, accountants, financial advisors, family members, and friends. With current laws, there is a clear fiduciary liability for trustees in the administration of the trust-owned life insurance component of an estate plan. Good risk management practices take a pro-active approach to risk; and as such, we recommend an annual review of all TOLI policies. With a properly designed review, the trustee receives documentation from the risk management professional that fiduciary duties of the trustee are being fulfilled.