A common estate planning strategy is to create a trust and have the trustee buy life insurance on the trust creator. The policy will pay off when that person dies and the proceeds can be used to pay estate tax. The basic plan calls for the trustee to buy assets from the estate or to lend money to the estate. Either way, cash will flow into the estate to be used for paying the tax bill. However, some estates consist largely or entirely of an IRA. If so, there will be no assets for the trustee to buy; an IRA can’t be used as loan collateral, either. Therefore, there will be a problem moving cash into the estate. Here’s the solution: Specify that the trust terminate when the insured individual dies. Then the beneficiaries can collect the insurance proceeds directly and use the money for paying estate tax.