Putting UK life insurance in trust - US reporting obligations for the trust

I have a term life insurance policy I took out years ago (very simple structure, flat premiums, flat payout in case of my death, no cash-in value).

At the time it was recommended that I put the policy in trust, but I never got around to doing it. I am finally getting around to arranging this but hit a snag: my research with Copilot says that a standard life insurance trust (the one offered by the UK insurer for free, in my case Legal & General) would be a foreign trust in the eyes of the IRS and would be subject to Form 3520-A filings (for the trust) and 3520 (for me to report the premium payments I make, which would count as transactions with a trust). However, it also says the forms would be straightforward and could be mostly copied from one year to the next.

Assuming I pick trustees who are all UK residents, Copilot also says that US citizenship of one or more trustees would not create any additional US reporting or tax obligation either for the trust or for the trustees personally.

Does anyone here have experience with such a life insurance trust and its status in the US? Has anyone had to get into the filing of these trust forms? I'm interested to hear real-life experiences of how bad the filing burden is in real life and whether it can be DIY'd.

I mailed out form 3520 today and only had to complete part IV. I had an international EA take care of this, as the form is not for the faint hearted. I had to file and not through any voluntary actions. Unless I had an international tax firm take care of this for the rest of my life and to handle that of my executors and trustees, I would say without hesitation, don't do it. I don't know your circumstances, but the form must be filed every year and the penalties for not filing out are tremendous.
You say that 'flat payout in case of my death'. I'm sure you have already declared this account on form 8938 and the FBAR. As there is cash value, you'll need to show this account.
On something this complex pay for a consultation with an international tax firm. Also, the cost of submitting, ONLY these 2 forms are about $1,000.

Thanks for the very helpful reply! To clarify, this concerns an insurance policy with zero cash value. It isn't a financial account. The question is whether to put this in a trust or keep it how it is.

But you say the policy has a 'flat payout in case of my death'. Although there is no 'cash surrender value', (you're not voluntarily surrendering the policy and cashing in). There is a POD value & this value must be reported on an annual basis, finCEN114, (if all your foreign accounts are over $10k in total) and 8938, (depending on filing status, thresholds and substantial presence test). This would be classed as 'other foreign asset' for 8938 purposes and be reported on part VI. I'd go with 'Other' for box 16 of finCEN114 and give a detailed description.

The asset has no fair market value because I haven't died (and might not die within the policy lifetime).

The IRS defines fair market value (FMV) under 26 CFR § 25.2512‑1 as the price between a willing buyer and seller, neither under compulsion.

Some years ago while planning my retirement strategy, I had a full consultation with a highly experienced international tax firm. It was expensive, but being a U.S. Person, I needed to understand my options on making life as simple as possible, with as little on-going IRS/Treasury reporting. Ultimately I bought a retirement annuity with no death benefit, so no cash value. As the product selected offered no cash value, I didn't need to report, (although income of course I do).
The person who I spoke with said that any insurance product that had a 'cash value', either surrender or POD must be reported on an on-going annual basis. The person went on to say, if ever in doubt, always report anyway, as it's such a simple addition to the FBAR, which pretty much everyone needs to file anyway. Also, to show the asset on form 8938, as again there is no penalty for adding.
I'm not a CPA, but even after contacting another professional with regards life insurance, (needs to be declared) and other insurance products that hold no cash value, I had the same response.
Maybe look for professional advice, especially given your thoughts on the Trust. If your advisor states that yes, you did need to report, many firms offer a discount on Streamlined procedure (SFOP) to bring you back into compliance with the IRS and Treasury.

That's an interesting point of view. But by that logic, if a term life insurance policy is considered to have a cash value because it might pay out under certain circumstances, wouldn't, say, your home buildings insurance have a cash value, because it would pay out if your house burns down? Wouldn't any insurance policy have a cash value corresponding to the maximum payout allowed by the insurance policy in the worst possible case? I doubt even the most gung-ho IRS examiner would make such a claim.