Trusts for life policies have many benefits. If you place a policy into a trust, it has the following benefits:
- Proceeds are paid to the right person/people.
- Proceeds are paid out quickly, the benefits can be paid as soon as the insurer admits the claim, so long as there’s at least one surviving trustee – you won’t need to wait for probate.
- Helps reduce Inheritance Tax liabilities – as proceeds fall outside your estate on death. Putting life assurance policies in trust can deliver significant tax savings for your estate
- Trusts offer protection against hostile creditors, which may arise in case of bankruptcy, divorce settlements and care costs
- It should be noted that there are HMRC rules against placing existing policies in trust when you have a life-threatening condition and die within a short time.