Why place your Life Insurance policy in Trust?

 

 

Putting your life insurance policy into trust with Taylor Milburn Financial can help you to protect your family’s financial future by ensuring the right people will benefit from it.

 

There are two main advantages to such action:

 

• Writing a Life Insurance policy into trust can help you to save time and reduce the worry that your policy with not be paid out soon enough to your next of kin by your chosen insurance company.

 

This is important because a life cover claim is usually made at a stressful time for the family so if your life insurance policy has been written into trust then the insurance policy will be paid out to the Trustees to then be passed onto beneficiaries straight away so they can begin to plan for the future. However, if you do not put your Life Insurance policy into trust then there would be a delay in payment until probate has been granted, either once the Will is deemed valid or Letters of Administration have been obtained. This can take as long as up to six months to be resolved.

 

• Writing a Life Insurance policy into trust could serve to reduce your level of Inheritance Tax liability.

 

This is important because when a Life Insurance policy is written into trust, then the premiums are typically referred to as ‘gifts’ for Inheritance Tax purposes. As a result, Life Insurance policies that are written into trust are usually covered by generous exemptions and will thus not form part of your estate for Inheritance Tax purposes. This could be significant for your estate planning since it is only the first £325,000 of your estate’s value that is free of tax.

 

One of our protection experts at Taylor Milburn Financial can give you further advice in relation to the benefits of writing your life insurance policy into trust and advise you regarding the most suitable form of trust to be used based on your needs even if you have already taken out your life insurance policy.

 

 

Contact Taylor Milburn Financial now for further advice on Trusts

 

Trusts are not regulated by the Financial Conduct Authority’