Should my living trust be the beneficiary of my life insurance?
Often, yes, especially if you have minor children or want the money handled by the rules in your trust. Naming your revocable living trust keeps the death benefit out of probate and lets your successor trustee use it as your trust directs, for example to support your children until an age you choose or to keep your business running; naming your estate, or no one, sends it through probate instead. Life insurance death benefits are generally not taxable income to the beneficiary.
Decide where your business goes.
- Will packageA last will and testament, prepared online from your answers.from $695
- Trust packageA revocable living trust with a certification of trust and a pour-over will, prepared online from your answers.from $1,495
Starting prices, per person. Couples can set up a joint trust for both of you, or two plans with $100 off the second.
- Free health care directive: Says who decides about your medical care if you cannot, and what you want.
- Free financial power of attorney: Names who can handle your money matters if you are alive but unable to act for yourself.
Boring Insurance Agency is a licensed insurance agency, not a law firm, and does not provide legal advice. No attorney-client relationship is created by using this service. These documents are self-help forms prepared from the information you provide. Laws vary by state, and your circumstances may require changes these forms do not make. We recommend you have an attorney licensed in your state review your documents before you sign them.
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Kevin Kelsey
Founder | Principal Agent
Founder and principal agent of Boring Insurance, CA License #6011822. He put off his own estate plan because he did not want to take the time to find a lawyer, then built the offer so owners can set up a will or living trust online and fund it with life insurance. He is a licensed agent, not an attorney, and these pages are not legal advice.
Who to name, at a glance
Your revocable living trust
- Avoids probate?
- Yes
- Good when
- You have minor children, a business, or want the trust’s rules to apply
A spouse or adult child by name
- Avoids probate?
- Yes
- Good when
- The person can manage a lump sum and the plan is simple
A minor child by name
- Avoids probate?
- Yes, but a court may need to appoint someone to manage it
- Good when
- Rarely the best choice
Your estate, or nobody
- Avoids probate?
- No
- Good when
- Almost never
An irrevocable life insurance trust
- Avoids probate?
- Yes
- Good when
- Estate tax is a concern; an attorney sets it up
The detail
Generally, life insurance proceeds a beneficiary receives because of the insured person’s death "aren’t includable in gross income and you don’t have to report them," though interest on the proceeds is taxable.
Federal law excludes from gross income "amounts received under a life insurance contract, if such amounts are paid by reason of the death of the insured," subject to exceptions for policies transferred for value and some employer-owned policies.
26 U.S. Code section 101 (Cornell Legal Information Institute)
California expressly allows a will to pour into "a funded or unfunded life insurance trust, although the settlor has reserved any or all rights of ownership of the insurance contracts."
A successor trustee can prove authority to an insurer or a bank with a certification of trust instead of the whole document.
California Probate Code section 18100.5 (certification of trust)
What this means for you
- Set up the trust first, then point the policy at it. The beneficiary form names the trust and its trustee. Our trust package includes a certification of trust, which is the document an insurer usually asks to see.
- Minor children are the strongest reason. Money left to a child directly may need a court-supervised guardian or custodian. A trust lets your trustee use it for the child under your rules.
- A revocable trust does not cut estate tax. If your estate could approach the federal exclusion, an irrevocable life insurance trust is the tool, and it needs an attorney.
- Check every policy you own. Group life through work, old policies and business-owned policies each have their own beneficiary form. A will does not change any of them.
Go deeper on any of these
Related questions
- Does life insurance go through probate?
Not if a living person or your trust is the named beneficiary. It goes through probate when the beneficiary is your estate, or when every named beneficiary has died and no one else is named.
- Is life insurance paid to a trust taxable?
The death benefit is generally not taxable income, whether paid to a person or a trust. Estate tax is a separate question that matters only for large estates, and a revocable trust does not change it.
- Can you set up the trust and the life insurance together?
Yes. We are a licensed life insurance agency and we offer living trusts through our document platform, so the trust can be signed and named on the new policy in the same few weeks. Approval and price depend on underwriting.
- Life insurance
- How do I know whether I need a will, a trust or an attorney?
Take the Business Owner Plan Check. It asks about ten short questions about the business, your household and what you already have, then says whether most owners in your position set up a will or a living trust, or should see an attorney first, and estimates the life insurance in ranges with the arithmetic shown.
- Take the Plan Check
Set it up, then fund it
We set up wills and revocable living trusts through our online document platform, from $695 for a will and $1,495 for a trust, and we place the life insurance that pays into them. We do not draft operating, partnership or buy-sell agreements, and we do not give legal advice; when your situation needs an attorney, the Plan Check says so.
Boring Insurance Agency is a licensed insurance agency, not a law firm, and does not provide legal advice. No attorney-client relationship is created by using this service. These documents are self-help forms prepared from the information you provide. Laws vary by state, and your circumstances may require changes these forms do not make. We recommend you have an attorney licensed in your state review your documents before you sign them.
Written by Kevin Kelsey, founder and principal agent, CA License #6011822. Last updated 2026-10-05. See all guides.