Chapter 12: Setting Up a Living Trust
Your Guide to Doing it Right

John is a doctor in his early 40s. He lives with his wife, Jane, and their five children, ages 2, 5, 7, 10, and 13 (with expectation of more) in their home. He has a good income from his practice and is gradually building up an estate. However, in the event of his death or disability, John knows that he would not be able to support his family in the same lifestyle they’re enjoying today. He is able to purchase a large life insurance policy on his life.

Then he takes another step. His lawyer helps him set up a revocable trust agreement with John and Jane as trustees, and with Jane’s brother and their trust company as successor-trustees. The life insurance contract provides that the proceeds of the life insurance policy be payable to the trustees. Now, regardless of what happens to him, John can provide for Jane and the support and education of their children.

John’s example shows how living trusts can work with other estate planning tools such as life insurance.