Many people are unaware that a life insurance policy is an asset that can be placed in trust.
A trust is a legal entity that allows you to put aside assets for a beneficiary. You can nominate one or more trustees to manage the trust until the beneficiary is ready to inherit.
Normally, a life insurance payout is considered as part of your estate, which will be liable to IHT on anything exceeding the £325,000 threshold. When you write your life insurance in trust, however, the payout won't be included in the value of your estate, leaving more for your loved ones.
Writing your life insurance policy in trust gives you more control over the payout. This is very important if you aren't married or in a civil partnership; otherwise, you intended recipient may miss out.
Trusts can be inflexible
However, one of the downsides of trusts is their inflexibility. Once a policy has been put in a trust, it usually can't be taken back out again. You could even risk invalidating your policy by trying to amend a trust.
If you are unsure whether or not to write your life insurance in trust, talk to us. We can guide you through the pros and cons in light of your circumstances.
As with all insurance policies, conditions and exclusions will apply
We can help you!
If you would like more information or expert help with your mortgage or insurance queries, please call us on 01344 225 149 or 07979 690 056. Alternatively please send us an email at firstname.lastname@example.org
Simmonds Mortgage Services is an appointed representative of Stonebridge Mortgage Solutions Ltd and can source the most appropriate cover from its panel of insurers with a free review of you overall protection and insurance needs. As with all insurance policies, conditions and exclusions will apply.