Irrevocable Life Insurance Trusts

Account Set Up Procedures

The following are recommended procedures to establish a new Irrevocable Life Insurance Trust account relationship with Santa Fe Trust:

  1. For new ILITs to be administered by Santa Fe Trust, your Insurance Advisor should arrange for a medical examination to determine your insurability before the trust document is drafted. Any preliminary application you sign should be signed in your capacity as the insured and not as the prospective owner.

  2. When you have determined that insurability exists, we will review the specifics of the proposed trust document and the proposed insurance policy or policies with your drafting attorney. This is typically a two week process.

  3. If your ILIT is already in existence and currently being administered by another trustee, Santa Fe Trust must review the trust document and all current or proposed trust-owned life insurance policies to determine whether the trust can be transferred and administered by SFT. If a transfer is possible and agreeable, we will suggest ways you could proceed. Typically, this is a two-week process.

  4. The final trust document must be executed by you and forwarded to us by the Insurance Advisor. We will then apply for a tax identification number and notify the Insurance Advisor. The Insurance Advisor must then complete and submit to us an ILIT Administrative Review Checklist disclosing all personal information necessary to establish the new trust account.

  5. Santa Fe Trust will set up the new account, including a trust-specific working capital account at our bank.

  6. The insurance application must be signed by the insured as the insured and not as the prospective owner then sent to us for review and signature as its owner. We will submit the signed application to the Insurance Advisor for submission to the insurer.

  7. We will notify you in writing to make the initial cash gift to the trust plus the account set-up and first year trust administration fees.

  8. We will then begin our administration duties and generate any required gift notices (Crummey letters) to the beneficiaries in a timely manner.

  9. After the required waiting period (IRS-required 30-day waiting period or that required by the trust document, whichever is longer) from the date Crummey letters are sent, we will pay the policy premiums.

  10. We will then send confirmation letters to all appropriate parties.