Document background
The Life Insurance Trust Agreement is a specialized legal instrument used in Malaysian estate planning to create a trust that holds and manages life insurance policies. This document is particularly useful when policy owners wish to ensure professional management and structured distribution of insurance proceeds, while potentially achieving tax efficiencies and avoiding probate delays. It becomes relevant when individuals seek to establish clear succession planning for insurance benefits, especially in complex family situations or when specific distribution requirements are needed. The agreement must comply with Malaysian insurance and trust laws, including the Financial Services Act 2013 and Trustees Act 1949, and can be structured to accommodate both conventional and Islamic insurance (Takaful) arrangements. It typically includes detailed provisions for trust administration, beneficiary rights, trustee powers, and distribution mechanisms.
