Under State law, the cash value of life insurance is not protected from creditor claims. At death, the death proceeds of life insurance you own are included in your estate for estate tax purposes. [Both of these/This] adverse result[s] can be avoided by transferring the life insurance policy to an irrevocable life insurance trust that would become the owner and beneficiary of the policy. The dispositive provisions of the trust would mirror the provisions of your revocable living trust. While this trust will be irrevocable, an independent trust protector can be granted significant flexibility to modify the terms of the trust to account for unanticipated future developments. If you are concerned about accessing the cash value of the insurance during your lifetime, the trust can be carefully drafted so that the trustee can make loans to you during your lifetime or so that trustee can make distributions to your spouse during your spouse’s lifetime. Even with these provisions, the life insurance proceeds will not be included in your estate for estate tax purposes. These trusts can be created by you individually (and typically own an individual policy on your life) or they can be created by you and your spouse jointly (and own a survivorship policy. Whether it is an individual or joint trust will depend upon the specific purposes for the insurance, as is discussed more fully under Life Insurance.