WSJ Article on Recent Court Case Highlights a TOLI Trustee Problem

A recent Wall Street Journal (WSJ) article (1) highlighted a problem we reported back in 2013 in a blog post entitled, So…What Happens at Age 100. The WSJ article tells the story of a Florida resident turning 100 years old who has an irrevocable life insurance trust (ILIT) that holds $3.2 million in death benefit. Because of contract language in his universal life policies, the trust will not receive the death benefit at age 100 when the policy matures, but only the cash value in the policy – a much lower amount. While the article states this is a “standard feature of permanent life insurance,” the insured/grantor and trustee are suing the carrier, Transamerica.