What is a trust?
A trust is a legal arrangement that lets the owner of something (such as your life insurance policy)’gift’ it to other people without giving them full control over it.
Why use a trust?
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You, as the settlor can choose who you wish to receive the money from your life insurance policy – the beneficiary.
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If it is necessary to make a claim under your policy, the trustees should receive the money quickly. Once the claim has been accepted, we’ll pay the money from your policy to the trustees, who will then pass it on to your beneficiaries, or look after it until the beneficiaries are old enough to deal with the money themselves.
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You will keep an element of control over your life insurance policy, as you’ll automatically become one of the trustees, as the settlor Your life insurance policy usually won’t be counted as part of your estate when you die, meaning that the benefit of the policy may be exempt from inheritance tax.
Where can I find more information?
We want you to be confident in any decisions you make. If you need more help and want to talk to a specialist such as a Financial Adviser or solicitor then you may find these links helpful www.unbiased.co.uk or www.lawsociety.org.uk.
Whether or not a trust is appropriate for you is dependent on your circumstances. You must make sure the trust you choose meets your needs, and should seek professional legal, tax and financial advice if you have any doubts.
