Taking out protection cover and putting the policy into trust can help you protect the financial future of your family and provide them with security and peace of mind. It can mean the right people will benefit from your policy at the right time. Putting your policy in trust can be done at no extra cost.
THERE ARE TWO MAIN BENEFITS OF PUTTING YOUR POLICY IN TRUST
- Save time and reduce the worry with immediate payment on your policy.
- A life cover claim is made at a stressful time for the family, with both emotional and administration issues to be taken on board. A trust can pay the life cover to the trustees to pay monies over to a beneficiary straight away so that their financial position remains sound, and they can focus on the future.
- If the policy was not under trust, then there would be a delay in payment until probate, when the Will is deemed to be valid, or letters of administration are obtained. This can often take up to six months.
2. Reducing your Inheritance Tax liability
- When you write your policy in trust, your premiums are known as gifts for Inheritance Tax purposes and can usually be covered by generous exemptions. The proceeds will not form part of your estate, where Inheritance Tax becomes payable on assets over £325,000 (tax year 2022/2023).
