Trust

[bstaxes]

Tp been advised by a financial lawyer to open a trust to pay for life insurance. Tp deposits the cost of the premium into the trust then writes a check to pay the premium. This is the only activity. Would you file the trust? I could go both ways, no activity not file, yes to let the IRS know the trust exists. Any suggestions would be helpful. Thanks.

[OldJack]

This lawyer knows what he/r is doing. Basically an insurance trust is to get the insurance proceeds when paid after death out of the estate for estate tax purposes not income tax purposes.

[JRS]

"This lawyer knows what he/r is doing."

Make sure the TP follows the lawyer's instructions exactly. I have done five and have always obtained an EIN for each and filed a return each year. In each case, since the TP was/is a good client, I would charge them a small set up fee and then each year, since there was no activity, print out the return and let them file it for no charge. I have had two pass away and I have made up substantially for the few years of "goodwill."