A trust is a legal arrangement where one or more ‘trustees’ are made legally responsible for holding your assets. The assets – such as land, money, buildings, shares or life insurance policies etc. – are placed in trust for the benefit of one or more ‘beneficiaries’.
At Friends Financial Advisers, we offer the service of putting a Life Insurance Policy into Trust, and we do it FREE of charge.
What are the advantages of writing a life insurance policy under Trust?
- Payment of the policy proceeds can be made quickly to the trustees. Insurance company doesn’t need to wait for Probate to be granted, which can be a lengthy and complicated process, taking up to several months in some cases.
- You can indicate beneficiaries – people who you want the proceeds from your life insurance policy to be paid to (i.e your wife, husband, your children or friends etc.).
If you don’t write your policy in trust the proceeds would usually be paid to the people who are appointed to look after your affairs when you die.
If you’ve made a will then you may have left specific instructions about who should get what. But if you haven’t then there are strict rules around who will get what from your assets when you die.
This may mean that the people who eventually get the money from your life insurance policy may not have been the people you wanted to get it.
- Once you’ve put your life insurance policy in trust, the proceeds that are paid out won’t normally be included in your estate for inheritance tax purposes, and can usually pass tax-free to whoever you choose as beneficiaries.
In 3 simple words: by putting your life insurance policy under trust is making sure that in the event of your death the right people will receive the policy benefits and they will receive it as quickly and tax efficiently as possible saving them time, money and troubles.