The Benefits Of Putting A Protection Plan In Trust

The Benefits Of Putting A Protection Plan In Trust

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Taking out protection cover and putting the policy into trust can help you protect the financial future of your family and provide them with security and peace of mind. It can mean the right people will benefit from your policy at the right time. Putting your policy in trust can be done for no extra cost.

 

There are two main benefits of putting your policy in trust.


Firstly, save time and reduce the worry with immediate payment on your policy.

A life cover claim is made at a stressful time for the family, with both emotional and administration issues to be taken on board. A trust can pay the life cover to the trustees to pay monies over to a beneficiary straight away so that their financial position remains sound, and they can focus on the future.

If the policy was not under trust, then there would be a delay in payment until probate, when the Will is deemed to be valid, or letters of administration are obtained. This can often take up to six months.

Secondly, reducing your Inheritance Tax liability

When you write your policy in trust, your premiums are known as gifts for Inheritance Tax purposes and can usually be covered by generous exemptions. The proceeds will not form part of your estate, where Inheritance Tax becomes payable on assets over £325,000 (tax year 2010/2011).

 

There are three main roles involved in a trust.


First, the settlor is the person who sets up the trust. They will appoint trustees to administer the trust and decide who the beneficiaries will be. They will also provide the property that will be held by the trust.

Second, the trustees will manage the trust fund for the beneficiaries. This includes making any claim under the protection plan and, if appropriate, investing any money paid out from that claim.

Third, the beneficiaries will receive the trust fund in line with the settlor's wishes.

 

There are several types of trust available for you to choose. Our expert team of qualified advisors can advise you on putting your policies into trust, taking the time to talk you through any queries you may have.


Rettie Financial Services

Our team are always happy to have a no obligation chat about the options that might be available to you.

Call us on 03301 759 977

Email us at financialservices@rettie.co.uk

Visit us to request a free financial services consultation at Financial Services | Rettie & Co.

About Bob Duncan

Bob joined Rettie in October 2021 as Managing Director of Rettie Financial Services. He leads our team of mortgage advisors, who have access to over 90 lenders and 12,000 mortgages. Prior to workin...