When property is transferred to a trust or LLC, attorneys or accountants often overlook the insurance aspect of naming them on the policy. It’s a good idea to speak with an attorney or accountant about insurance when you’re establishing a new business entity.
There are three or four questions you can ask to start a dialogue. To begin with, who are the parties to the trust/LLC, and what’s their relationship to each other? For example, are the people involved family members, business partners or some other relation? Secondly, is the trust or LLC considered an “active” entity, created for other business interests in addition to this particular property, or “passive,” created for the protection of the individual/spouse/family?
Another question to ask is whether the contents of the home/property are also owned by the trust/LLC. Is the ownership of the property/home solely the structure, or does it include the property contained within it? You don’t want to make the mistake of failing to insure all of the assets within the property.
It’s really important to tackle these questions when transferring property into a trust/LLC. Never assume that when the transfer is made, the new entity is automatically covered by the policy.
Life insurance products contain fees, such as mortality and expense charges, and may contain restrictions, such as surrender periods.