Trusts & Taxes

It is not essential to write your life insurance policies into trust however you could avoid inheritance tax and potentialyl speed up the processs of payment from your policy if you do write your policies into trust.

Do not be fooled by the common statements from other advisers such as, “a life insruance policy can nly be written into trust within a certain time frame of starting the policy” or “your policy needs to be redone to be able to not be part of the 7 year inheritance tax rule” or “your policy will not pay out if it is not written into trust” – all of these statements are not true and are coommoonly used to dupe people into changing a policy which is perfectly and adeqautely suiting their needs. (If you have come across anything like this please contact the insurance helpline on 0141 248 9787 immediately and we can assure you as to what is the truth and what is not!)

SO, WHAT IS A TRUST EXACTLY?

This is akin to a mini Will for your ‘life insurance’ part of your policy. Regardless of when your policy start date was or is you can always write a policy into Trust without having to change the policy itself! A Trust allows YOU to nominate your beneficiaries (the people who will receive the money from your life insurance pay-out in the event of your death) of your policy on a form which means in the event of death your money pays out to who you request it to and it doesn’t get tied up in any other affairs – this also quickens the process of the policy paying out.

Providers now have online Trust forms which can be utilised for writing any old or new policies into Trust HOWEVER at The Insurance Helpline we have devised a tried and tested process for completion of Trust forms which consists of the a clear and precise explanation of the Trust and how it should be completed. We have also devised a unique guide for every Provider (as part of our customer feedback) and we have developed a short telephone appointment scheme to allow you to complete the Trust with a full understanding of it and at your personal convenience!

WHY WOULD I WANT TO WRITE MY POLICY INTO TRUST?

One of the biggest benefits of writing your life insurance policy in trust is that you can actually sidestep paying inheritance tax as the value of the policy will not count towards the value of your legal estate. Normally, when you die, the value of your legal estate is calculated and anything beyond the threshold of £325,000 is taxed at 40%.

If you have out a conventional life insurance policy, then the value of it will be included in the calculation of your legal estate. However, if your life insurance is placed in a trust, then the proceeds from it will be sent directly to the beneficiaries and not to your estate, therefore not counting towards the inheritance tax threshold.

Another benefit of writing a life insurance policy in trust is that the whole process of the pay-out is somewhat more streamlined, as you don’t need to go through probate. Normally, when the time comes for your life insurance policy to pay out, a legal process must be undergone by which the executor’s authority to deal with your assets is confirmed. This is known as the granting of probate. This can be a long process, particularly when there is no will (known as intestacy), but even if there is one it can take a while. If your life insurance is put into a trust, then probate can be bypassed altogether; all that is needed for the policy to be paid out is for a death certificate to be provided.

Source https://www.moneyexpert.com/life-insurance/writing-life-insurance-in-trust/#s1

FAMILY & BUSINESS PROTECTION TRUSTS

This could be Property Protection Trust, Disabled Person’s Trust, Interest in possession Trusts, Business Protection Trust and more.

Putting any asset into a Trust makes that asset protected for the defined beneficiary and it also protects it from statutory forces such as charges to Government in case of requiring residential Care in Care home at a later life.

Protection of Disabled child’s future is not just a necessity but it can be very serious concern for every parent. There are many tax advantages in favour of Disabled person if a property destined for him/her is protected in a Trust.

Trust is a legal document and an Active Trust is a legal entity. It is administered by the Trustees who are trusted people and have legal responsibility to protect and manage the asset for the benefit of Beneficiary. Specialised Trust is often managed by Trust Corporation or Solicitors.

If you are interested or if you wish to know more about this type of Trust, please contact indira@theinsurancehelpline.org.uk OR call our Office at 0141 248 9787.

PROVIDERS’ TRUST FORMS & GUIDES

Below we have provided the PDF’s for the main Providers Trust Forms and Guides. Please click on the necessary links to retrieve the documents (these can be printed out or saved to your computer). If you are in need of our Trust Forms and Guides (hardcopy) or you wish to have a telephone appointment with our Trust and Wills Advisor please contact The Insurance Helpline on 0141 248 9787 or email questions@theinsurncehelpline.org.uk.

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