Last Updated Sep 29, 2009 3:31 PM EDT
The delay started with a simple error on our lawyer's part. The name she used on the instruction sheet for the trust didn't match exactly with the trust document itself. And since my husband and I followed the directions, we now need to contact the IRS and formally change the name on our tax ID number and the trust's bank account.
While changing the name is not a big deal, it's just one more hassle I really don't feel like dealing with. I'm also fairly confident that the transition won't go smoothly. While getting a tax ID number from the IRS was very easy -- I'd recommend doing the whole thing online -- dealing with my local Chase branch was a bit of a headache. The representative who helped us had clearly never opened up an account for a life insurance trust before. He managed to waste over an hour of my time and make multiple mistakes that required me to make a second trip to the bank. (He couldn't even order checks properly.)
The biggest delay, however, was caused by my insurance broker. The agent just didn't seem all that familiar with life insurance trusts. When I looked over the initial application, I noticed multiple errors that would have made the trust invalid had I signed the paperwork. Once those issues were corrected, someone else handling the paperwork for the agent discovered more problems. All in all, it has taken a few weeks for the application to get filled out properly and sent out to the underwriters for approval. (Without a trust, I imagine it would have taken about 10 minutes.) If we don't encounter any more surprises, we should hopefully have a policy in force within six weeks.
Waiting another month or so really isn't that big a deal. I just wanted to get everything taken care of before I'm up to eye balls in diapers and too tired to think about estate planning. I also know that if my baby had come on time, I doubt I would have returned my insurance agent's phone calls for a few weeks (at the soonest) since purchasing life insurance would have taken a back seat to mothering a newborn.
So my one bit advice for other expectant parents who want to buy insurance and set up a life insurance trust -- and I hope there are many that do -- is to get on it as soon as possible. While the process itself should be relatively straight forward, don't be surprised if you encounter a few headaches along the way and if it takes much longer than you anticipate. The peace of mind that your family's needs will be taken care of should anything happen to you or your partner should hopefully make the hassle worth it.
Baby image by Amy_b, CC 2.0.