Trust Substitute by Michael Malloy

PPLI Offers the Following Advantages

  • Creates viable structure for civil law jurisdictions
  • Creates new role for commercial trust company
  • Creates structure viable under specific insurance regulations

 

In most civil law jurisdictions, trusts are poorly acknowledged and trust law is not well developed 1. This can create obstacles for those domiciled in these civil law jurisdictions that have created foreign trusts. However, in certain circumstances, a PPLI structure can circumvent these problems and achieve the planning aims one would more commonly be able to fulfill with a trust in a common law jurisdiction.2

Indeed, life insurance is generally recognized in almost all jurisdictions, and a PPLI structure can actually fulfill the functions of both a trust and life insurance.

In situations where it is advantageous for the insured person under the policy to also be the owner, a commercial trust company can still act as the administrator of the assets inside the policy.

The specific insurance regulations of the domicile of both the policy owner, possibly a trust, and the insured person(s) under the policy, must be thoroughly understood for a properly executed plan using the precepts of Expanded Worldwide Planning (EWP).

 

Endnotes

  1. “ Wikipedia Trust in civil law jurisdictions,” https://en.wikipedia.org/wiki/Trust_law_in_civil_law_jurisdictions
  2. “Wikipedia Private placement life insurance,” https://en.wikipedia.org/wiki/Private_placement_life_insurance see section, PPLI outside the USA.
  3. supra note 2, see section , PPLI outside the USA, at References and Additional Resources, note 5.

 

by Michael Malloy, CLU TEP, @ Advanced Financial Solutions, Inc