Put your life insurance into trust.

What is a trust?

A trust is an entity in which your assets are ‘held under’ whilst your beneficiaries are unable or incapable of taking them on themselves. The assets held under a trust are managed until it is appropriate for your beneficiaries to manage them themselves. A good example would be a relative such as your brother or sister looking after a house until your children are old enough to take responsibility for it themselves. Insurance policies are also an asset which can be held under a trust. The pay-outs from these policies can be managed in accordance with the terms set out by the trust and have some other benefits in the long run.

How can a Trust benefit me and my next of kin?

Tax Benefits. Life insurance pay-outs are already exempt from capital gains tax and income tax. However, they are usually subject to inheritance tax as they are part of your legal estate. However, if you put your policy “In trust”, the pay-out is made directly to your beneficiaries and will not be considered when inheritance tax is being calculated.

Skip Probate. When a person dies, probate courts distribute a person’s assets to the right beneficiaries. However, this can be a lengthy process and can be made even longer if you have not written a will. By naming a policy in trust it can mean that the beneficiaries can receive their pay-out direct from the insurance company. This can help if your beneficiaries need the money quickly.

No Extra Costs. Insurance providers can set up a trust for you when you purchase your policy with no surcharge. It is also possible to transfer active policies into trust.

Speak to us for further information.