Watch Your Back and Cover Your TracksWatch Your Back and Cover Your Tracks
A client's lack of sophistication and guidance regarding trust-owned life insurance (TOLI) can put estate-planning lawyers in the hot seat. Most states have now enacted the Uniform Prudent Investor Act (UPIA), which imposes a higher standard of care and greater liability on trustees of irrevocable life insurance trusts (ILITs) than the prior prudent investor standard. As such, the UPIA has indirectly
December 1, 2011
Melvin A. Warshaw
A client's lack of sophistication and guidance regarding trust-owned life insurance (TOLI) can put estate-planning lawyers in the hot seat. Most states have now enacted the Uniform Prudent Investor Act (UPIA), which imposes a higher standard of care and greater liability on trustees of irrevocable life insurance trusts (ILITs) than the prior prudent investor standard.
As such, the UPIA has indirectly placed a heightened standard of care and exposure on lawyers who are involved in advising clients on initial policy selection and funding, subsequent policy performance evaluation and restructuring. At least 10 of the states have responded in varying forms to the difficulties of ILIT trustees managing TOLI under the UPIA, by ...
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