Life insurance is all about protecting the people you care about most. But here’s something many people don’t realise: if you put your life insurance into trust, you can make things much easier – and often more beneficial – for your loved ones when the time comes.
Not sure what that means? Don’t worry – we’ll break it down simply.
1. Your family gets the money quicker
Normally, if a life insurance payout goes into your estate, your family has to wait for probate (the legal process of sorting out your estate). That can take months, or even longer.
By using a trust, the money goes straight to the people you’ve chosen – so they can access it much faster, when they might really need it.
2. You choose exactly who gets what
A trust lets you decide who should receive the money and in what share. No confusion, no relying on wills or intestacy laws – just a clear plan that reflects your wishes.
3. It could save your family thousands in tax
Without a trust, a life insurance payout usually counts as part of your estate. That might push its value over the inheritance tax threshold, meaning 40% tax could apply.
With a trust, the payout normally isn’t included in your estate – which can save your loved ones a lot of money.
4. Helps avoid disputes
Sadly, estates can sometimes be challenged. Because a trust sits outside of your estate, it makes it harder for anyone to delay or contest the payout.
5. Free and simple to do
Here’s the best bit – insurers will let you write your policy into trust for free, and it’s often just a matter of filling in a form. A small step now can make a big difference later.
The bottom line
Putting your life insurance in trust means faster payouts, less tax, and more control over where the money goes. It’s a straightforward move that gives your loved ones the protection you intended, without the headaches.
If you already have life insurance, it’s worth checking whether your policy is in trust – and if not, asking your insurer about getting it sorted.
Putting Your Policy in Trust
Life insurance is all about protecting the people you care about most. But here’s something many people don’t realise: if you put your life insurance into trust, you can make things much easier – and often more beneficial – for your loved ones when the time comes.
Not sure what that means? Don’t worry – we’ll break it down simply.
1. Your family gets the money quicker
Normally, if a life insurance payout goes into your estate, your family has to wait for probate (the legal process of sorting out your estate). That can take months, or even longer.
By using a trust, the money goes straight to the people you’ve chosen – so they can access it much faster, when they might really need it.
2. You choose exactly who gets what
A trust lets you decide who should receive the money and in what share. No confusion, no relying on wills or intestacy laws – just a clear plan that reflects your wishes.
3. It could save your family thousands in tax
Without a trust, a life insurance payout usually counts as part of your estate. That might push its value over the inheritance tax threshold, meaning 40% tax could apply.
With a trust, the payout normally isn’t included in your estate – which can save your loved ones a lot of money.
4. Helps avoid disputes
Sadly, estates can sometimes be challenged. Because a trust sits outside of your estate, it makes it harder for anyone to delay or contest the payout.
5. Free and simple to do
Here’s the best bit – insurers will let you write your policy into trust for free, and it’s often just a matter of filling in a form. A small step now can make a big difference later.
The bottom line
Putting your life insurance in trust means faster payouts, less tax, and more control over where the money goes. It’s a straightforward move that gives your loved ones the protection you intended, without the headaches.
If you already have life insurance, it’s worth checking whether your policy is in trust – and if not, asking your insurer about getting it sorted.
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