We normally recommend that you name your revocable Living Trust as the primary beneficiary of your life insurance. If you are married, your surviving spouse is typically a Co-Trustee of the Trust and the beneficiary of the Trust, and thus would manage any insurance proceeds paid to the Trust for his or her own benefit. In the event that the surviving spouse is legally incapacitated, the successor Trustee would have the legal authority to step in to manage and distribute the insurance proceeds for the benefit of the incapacitated surviving spouse. If you are single, or your spouse predeceases you, the proceeds are paid to the Trust and the successor Trustee then administers and distributes those funds to your contingent beneficiaries (children, grandchildren, etc.) in accordance with the distribution provisions you have outlined in your Trust. This is particularly beneficial for beneficiaries who are still minors.
In the event that the net value of your insurance policy(ies), when added to your remaining estate, will cause your estate to exceed the estate tax exemption limit, we recommend an advanced estate planning device known as an Irrevocable Life Insurance Trust, which effectively removes the proceed value from your taxable estate.