I would add one point: the need for a policy audit on a regular basis. Let’s suppose the life insurance policy inside the trust performs lower than expected. Let’s say the face amount is reduced due to insufficient premium payments, or weak interest rates.

The benefit amount may therefore not be sufficient to meet the terms of the trust. Under those circumstances, the trustee may get targeted for liability. Regular policy audits to monitor the performance of the policy – and make adjustments in payment as necessary, even to the point of replacing inferior policies – could avoid this problem.