{"id":72123,"date":"2019-06-11T12:50:22","date_gmt":"2019-06-11T12:50:22","guid":{"rendered":"https:\/\/www.templewealth.co.uk\/?p=72123"},"modified":"2019-06-11T12:54:53","modified_gmt":"2019-06-11T12:54:53","slug":"should-your-life-insurance-policy-be-in-trust","status":"publish","type":"post","link":"https:\/\/www.templewealth.co.uk\/should-your-life-insurance-policy-be-in-trust\/","title":{"rendered":"Should your life insurance policy be in trust, and who will benefit from it?"},"content":{"rendered":"\n

So, you\u2019ve\nalready arranged a life insurance policy, or you may be about to do so. Perhaps\nyou\u2019ve done this to cover a debt such as a mortgage, or to provide a lump sum\nfor your partner or your financial dependents. But should this policy be in\ntrust? Who will get the money and how long will it take?<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

If you have made a will then it will contain a list of who you wish to receive the benefits of your estate, but before this can be carried out your executors will have to apply for a grant of probate. If you haven\u2019t made a will, any assets will be subject to the Laws of Intestacy which could see them go to the wrong people.<\/p>\n\n\n\n\n\n\n\n

Probate (or confirmation as it is known in Scotland) is a necessary\nlegal process that is required before a deceased’s assets can be distributed in\naccordance with their will. For those who die intestate (without a will), the\nprocess requires an application for letters of administrationwhich is a\nsimilar process to probate. <\/p>\n\n\n\n

It\u2019s estimated to take on average between 9 and 12 months to obtain a grant of probate during which time the beneficiaries will not have access to any proceeds from the deceased\u2019s estate. This includes life insurance policies unless they have been written in trust.<\/p>\n\n\n\n

Why use a trust?<\/strong><\/h4>\n\n\n\n

For this example, a trust is a legal arrangement designed to help you\nensure that the proceeds from your life insurance policy go to the\nbeneficiaries as you intend. If you don\u2019t have a trust, the money could be used\nto pay off outstanding debts rather than going to your dependants.<\/p>\n\n\n\n

By having a\ntrust in place, this enables you to confirm who should receive the proceeds of\nthe policy and removes the need for probate. If your life insurance is \u2018written\nin trust\u2019, your loved ones can get access to the money more quickly \u2013 usually\nwithin just a few weeks<\/strong> \u2013 after the death certificate is produced, instead\nof the 9 to 12 months average for probate.<\/p>\n\n\n\n

Writing the\npolicy in trust also means any payment on death is outside of your estate for\ninheritance tax purposes. In fact, many people take out a life insurance policy\nwritten in trust specifically to cover the cost of their inheritance tax\nliability.<\/p>\n\n\n\n

Life insurance policies can be written in trust at inception, and some after they have commenced so it\u2019s not too late to do something about it if you have a policy that isn\u2019t in trust.<\/p>\n\n\n\n

Inheritance Tax<\/strong><\/h4>\n\n\n\n

If, when you\ndie, the value of your estate is valued above \u00a3325,000 (if you\u2019re single or\ndivorced) or \u00a3650,000 (if you\u2019re married, civil partnership or widowed),\neverything you own above this threshold will generally be liable to inheritance\ntax at 40%. Your estate includes all your assets such as your home, savings,\npossessions and any life insurance payment \u2013 unless it is written in trust.<\/p>\n\n\n\n

So if, for\nexample, your estate is valued at \u00a3525,000, your inheritance tax bill will be\n\u00a380,000, which is 40% of the \u00a3200,000 above the \u00a3325,000 threshold. However,\nyou don\u2019t have to pay inheritance tax on life insurance policies which have\nbeen written in trust.<\/p>\n\n\n\n

Getting the correct advice<\/strong><\/h4>\n\n\n\n

Bear in mind there is a lot of jargon associated with trusts \u2013 they are complex legal entities after all. When you set up a trust you become \u2018the settlor\u2019. You then choose the \u2018trustees\u2019 who are responsible for looking after the policy. It is up to them to make sure your beneficiaries receive the money as and when you want them to.\u00a0 There are many different types of trust, some of which are \u201cset in stone\u201d and others that you can make changes to.<\/p>\n\n\n\n

Getting the\ncorrect advice is crucial as it is important to set up the correct trust for\nyour individual needs. <\/p>\n\n\n\n

\"Mortgage<\/figure>
\n

You can contact one of our independent financial advisers at Temple Wealth Management on 01329 282882, or by sending us a message using our Facebook<\/a> or Contact Us<\/a> page \u2013 we will ensure you have the cover you need and it is in the correct type of trust.<\/p>\n<\/div><\/div>\n\n\n\n

The Financial Conduct Authority does not\nregulate Wills, Trusts or Inheritance Tax Planning. Levels, bases of and\nreliefs from taxation may be subject to change and their value depends on the\nindividual circumstances of the investor.<\/p>\n","protected":false},"excerpt":{"rendered":"

So, you\u2019ve already arranged a life insurance policy, or you may be about to do so. Perhaps you\u2019ve done this to cover a debt such as a mortgage, or to provide a lump sum for your partner or your financial dependents. But should this policy be in trust? Who will get the money and how […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[39],"tags":[59,61,60],"acf":[],"yoast_head":"\nShould your life insurance policy be in trust, and who will benefit from it? - Temple Wealth<\/title>\n<meta name=\"description\" content=\"Life insurance policies can be written in trust at inception, and some after they have commenced - so it\u2019s not too late to do something about it if you have a policy that isn\u2019t in trust.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.templewealth.co.uk\/should-your-life-insurance-policy-be-in-trust\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Should your life insurance policy be in trust, and who will benefit from it? 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Perhaps you\u2019ve done this to cover a debt such as a mortgage, or to provide a lump sum for your partner or your financial dependents. But should this policy be in trust? Who will get the money and how…","_links":{"self":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts\/72123"}],"collection":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/comments?post=72123"}],"version-history":[{"count":0,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/posts\/72123\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/media?parent=72123"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/categories?post=72123"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.templewealth.co.uk\/wp-json\/wp\/v2\/tags?post=72123"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}