Although putting a policy in to trust isn’t necessarily suitable for all people, it can be advantageous in the case of many.

This guide is here to give you a basic understanding but please speak to your Mortgages To Go expert in order to proceed with setting up the most suitable trust.

What is a Trust?

A trust is a simple legal arrangement that allows you (the settlor) to gift your life insurance policy to someone else (the beneficiary). It’s a great way to ensure that your life insurance is not considered to be a part of your estate when you die, so your beneficiaries won’t face the burden of inheritance tax on your life policy.

How do Trusts work?

Setting up a trust means that you (the settlor) give your policy to the trustees who then legally own your policy and look after it for the benefit of your beneficiaries. You will still be responsible for paying the premiums on the policy, but the trustees will be responsible for the trust deed.

It is important to select the right type of trust as some cannot be amended. However the right trust can provide lots of flexibility so that your changing circumstances can be taken in to account.

What are the advantages in having a Trust?
  • You get to specify who the beneficiaries are, and who you trust to act on your wishes.

  • Avoiding Inheritance Tax – using a trust should mean that the money paid out from your life insurance will not be part of your estate, increasing the amount of money that can passed to your beneficiaries.

  • Quicker payment of the sum assured – with a trust you do not need to wait for probate to be granted so the money can be paid to those who need it a lot quicker.

How do I set one up?

Speak to your Mortgages To Go expert today to assist you with placing your policy in to the most suitable trust.

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