Trust Owned Life Insurance

Transcription

1 C O M P A N Y O F D E L A W A R E Trust yourself. Rely on us. Trust Owned Life Insurance A complete insurance trust partnership designed specifically for financial advisors & their clients

2 World Class Trust Services Reliance Trust is one of the nation s largest independent trust companies. As the major subsidiary of Reliance Financial Corporation, it is able to draw on all of the resources of an independent financial services company with a truly national reach. In particular, Reliance Trust has a strong tradition of providing world-class personal trust services both directly to beneficiaries and in partnership with financial advisors. Reliance Trust has a unique tradition of allowing you and your clients to maintain your professional advisors such as attorneys, financial planners and CPAs after assets have moved into a trust. We know the importance of these life-long, multi-generational advisor relationships and work closely with many of our clients advisors. Align with a Partner that Specializes in Trust Administration Reliance Trust provides trust owned life insurance to financial advisors nationwide. Reliance Trust serves as an independent corporate trustee, and provides daily administration, policy monitoring and asset reviews. This ensures that you and your clients receive the very best possible oversight and execution of their estate plans while staying informed and involved throughout the life of the trust. Reliance Trust can provide a combination of trustee experiences and comprehensive insurance trust management services that will strengthen your client relationships. Besides administering the trust, Reliance Trust tracks all aspects of an insurance policy and the financial status of the carrier. A thorough understanding of proposed policy funding is established along with an evaluation of policy components, features and characteristics. Reliance Trust provides the financial advisor with automatic updates and alerts on critical changes or important information as it occurs. Providing the Right Solutions Reliance Trust offers the services and products your clients need. We coordinate our efforts with yours to ensure that your clients receive the best possible trust services. We offer a complement of investment management, estate and financial planning and a number of various trusts services designed to integrate with your existing services. Whether your clients trust needs are simple or complex, our professionals have the resources and experience to provide you with the right solutions.

3 Your Complete Trust Management Solution Trust File & Policy Setup Information provided by advisor will be used to establish trust within its administration system All documents are digitally saved in folders for easy access as needed Key contact information is entered to ensure all appropriate persons consistently receive various letters, notices and reports Reliance Trust audits, prepares and initializes each trust account and insurance policy on the administration and workflow management system Trust Suitability Review & Remediation Reliance Trust coordinates with any associated trust or client advisors to have goals and objectives reviewed along with other pertinent information such as: beneficiary status, contact information, health changes, smoker rating, policy riders, disability waiver, split option conversion option, auto increase option, increasing versus level death benefit and gifting commitment If the policy receives a poor evaluation, the advisor will be invited to assist the trustee with remediation services which may include a discussion about source of funds, commitment to continue funding, etc. Reliance Trust follows up with agent, advisor and grantor (if necessary) to resolve issues around policy or trust Irrevocable Life Insurance Trust (ILIT) Administration Request gifts to trust from the grantor to fund premium payments Monitor and track the receipt of gifts to respective trusts Prepare, distribute and track Crummey Withdrawal Notice letters as applicable Monitor and track the payment of all insurance premiums Review policy correspondence including - but not limited to - policy change requests, annual and quarterly reports Monitor and track the completion of an independent annual policy review Interact with Insurance Advisors and other investment professionals Insurance Company Tracking An exhaustive list of insurance carrier ratings history and financial information is maintained and available upon request Historical rating information is available for up to 500 carriers dating back to 2003 Ratings changes are posted every two weeks and AM Best financial information is updated annually

4 Procedures for New Insurance Trust Account & Policy The Seven Simple Steps Our procedures are designed to make the setup process for establishing a new insurance trust account and its policies turnkey. We work closely with the advisor to ensure that all steps are completed. We are available should any questions arise. 1. Insurance Application Process (New Policy) To accelerate the insurance underwriting process, the advisor may write and submit an insurance application directly to the carrier without naming Reliance Trust as trustee. Upon acceptance of the trust, Reliance Trust will establish themselves as trustee and policy owner. 2. Trust Review & Acceptance (New or Existing Trust) A copy of the trust agreement needs to be provided to Reliance Trust as soon as possible. Send to: Trust Owned Life Insurance (TOLI) at Reliance Trust Company of Delaware, 200 Bellevue Parkway, Suite 220, Wilmington, DE 19809, telephone , fax , or to: toli@relico.com. See #6 for implementation information 3. Asset Review & Acceptance (New, Existing or Replacement Policy) IMPORTANT: Please refer to the Trust Owned Life Insurance Policy/Trust Checklist in this brochure. If you have any questions please contact Reliance Trust at Agent Licensing Requirements The Advisor must be licensed in the state where the insurance application is written. If Reliance Trust will be the trustee and policy owner upon Reliance Trust s acceptance, the advisor may be required to be licensed in the State of Delaware as Reliance Trust Company of Delaware is a Delaware domiciled trust company. Check with your insurance carrier to find out their specific requirements. For nonresident licensing information please contact the state of Delaware directly.

5 Procedures for New Insurance Trust Account & Policy 5. Underwriting Approval & First Premium Payment When the application for insurance has been accepted by the insurance company, the advisor must establish Reliance Trust as the trustee. Advisor will assist grantor in remitting payment to Reliance Trust To expedite the process and save underwriting, Reliance Trust requires each trust beneficiary to provide a signature on the Crummey Notice letters, electing to NOT withdraw their portion of the gift. This will allow for immediate payment of premium without waiting for expiration of the standard 30-day beneficiary withdrawal period Upon receipt of these documents, the application will be signed and returned to the advisor. 6. Implementation & Welcome Letter Upon Reliance Trust s approval of the trust agreement, the advisor will be informed and a welcome letter will be prepared and sent to the grantor/advisor including the following information: A. Trust acceptance form, signed by Reliance Trust officer B. Reliance Trust fee schedule acknowledgement C. Gift notice request letter for the initial policy premium and trustee fee D. Crummey Notice letters for each beneficiary with signature waiving their right to withdraw funds 7. Trust Administration Reliance Trust will mail a gift notice to the grantor days prior to premium due date - cc: advisor Crummey Notices will be mailed to beneficiaries upon receipt of the gift Premium will be paid to the carrier upon expiration of the beneficiary withdrawal period A Grantor Report will be sent to the client 60 days following policy anniversary - cc: advisor Rely on us for all your trust needs Reliance Trust is your resource for all types of trust and fiduciary services such as: Family Trusts Revocable Living Trusts Charitable Remainder Trusts Irrevocable Trusts Special Needs Trusts Irrevocable Life Insurance Trusts

6 Getting Started This is a simple checklist for financial advisors to follow when doing one of the following activities: Underwriting a new policy Having Reliance Trust as successor trustee Replacing an existing policy Send to: TOLI at Reliance Trust Company of Delaware, 200 Bellevue Parkway, Suite 220, Wilmington, DE 19809, telephone , fax , or to: toli@relico.com. Trust Owned Life Insurance Policy/Trust Checklist Contact information for grantor, insured and beneficiaries Copy of the trust document Copy of the entire policy At least two in-force illustrations: One as-is - actual premium being paid One showing premium needed to reach maturity If illustration of actual premium being paid does not carry to maturity, a catch-up illustration must be provided. (example: a policy designed to run to age 121, but illustrated to run to age 100 only and then lapse... we want to know what the premium is at age 100 to continue the policy) As sold illustration, if available PLEASE NOTE: If this is a replacement case - we will need an explanation as to why the policy is being replaced and an illustration for the existing policy with the same death benefit and premium as the new policy Name of agent, address, phone number and address Objective of the trust Is this a new ILIT or will Reliance Trust be the successor trustee? Is this grantor making the premium payment? If yes - amount and number of years they expect to pay If no - will the premium ever be paid? If so, when, and how much? Copies of the premium notices and/or recent annual statements If variable contract, risk questionnaire filled out by grantor(s) for asset allocation of separate accounts Please include any other information or illustrations that may assist with reviewing the policy and understanding the client s objectives Final Steps After you gather the information and have sent it in, the policy will be reviewed. If approved, you will receive a form that lists any caveats to the policy purchase or replacement and summary of policy premium parameters. If you agree with that form, Reliance Trust will provide a Letter of Understanding for Grantor outlining parameters and expectations about the policy. You will be kept informed and copied on all correspondence. If the policy is not approved, we will provide reasons for concern and will work with you to remedy the situation.

7 C O M P A N Y O F D E L A W A R E Reliance Trust Company. All Rights Reserved.