With regards to Protection policies, a Trust is a document that allows you spell out what you want to happen to proceeds from a policy.
Placing a life policy in trust can help make sure the proceeds of your policy are used as you intended.
There are three main benefits for putting a policy in trust:
You can help to ensure that the right people receive the money from the life policy
Faster payment of the money
Using a trust should help to ensure that the money paid out from your life policy can be paid out to the people of your choice quicker.
Potentially avoiding the policy proceeds being subject to Inheritance Tax
When a life policy is not held in trust, it will normally be considered part of the estate meaning it can be subject to Inheritance Tax. Using a trust should mean that the policy is not part of the estate and should therefore not normally be subject to Inheritance tax *
To summarise, Trusts are all about ensuring the right money goes to the right hands at the right time.
Putting a Life Insurance policy that we have recommended in Trust, is an additional service we offer FREE of charge to our clients. This could cost you hundreds if done by a solicitor.
* Neither Hadley-Clarke Mortgages nor PRIMIS/First Complete Ltd is able to provide taxation advice. Should you require advice on taxation matters you should consult with a suitably qualified professional. The Financial Conduct Authority does not regulate Trusts.