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A guide to Trusts & being a Trustee

Considered a vital and valuable part of Financial Planning are the use of Trusts and writing a life policy in Trust, but what is a Trust?

In broad terms, a trust is simply a way of gifting property. Any type of property such as shares, buildings and cash can be the subject of a trust. You can also use a trust to make a gift of a life policy on the terms set out in the trust document.

BenefitsWhy use a Trust

  1. To ensure that the proceeds of the Life Policy are paid out immediately without the need to wait for a grant of probate
  2. To ensure that on your death, the proceeds of the Life Policy do not form part of your Estate for Inheritance Tax purposes
  3. To ensure that the proceeds of the Life Policy reach your chosen beneficiary(ies).

If your Life Assurance polity is NOT in trust, it is likely:

  1. that there may be a delay in the payment of the proceeds of the Policy on your death whilst you await the Grant of Probate; and
  2. the proceeds of the Policy will form part of your Estate for Inheritance Tax purposes and therefore your Estate may have more tax to pay;
  3. that without a will the proceeds paid out by the policy on your death may be distributed to someone other than you had intended. You may also wish to take this time to consider making a will, if you have not already done so.

For more details and information on Trusts, please our downloadable guides in our Document Library, or to discuss in detail, contact one of our Financial Advisers at Clearwater Financial Planning, Kingsbridge on 0548 856096

Trusts are not regulated by the Financial Conduct Authority.

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