We recommend that your life insurance policies should be written "in trust".
We always recommend that your life insurance policy should be "written in trust" for two resaons:
- If you were to die, the proceeds from the policy would be paid quickly and directly to
the person(s) you intended. If the policy were not "wriiten in trust", the proceeds would be paid to your estate. Therefore, by having the policy "written in trust" and paid directly to the person(s) you intended, the legal delays related to the administration of your estate are avoided. The arrangement also avoids you solicitor charging fees for handling the money!
- Having your policy "written in trust' also makes certain that the money from the life insurance
policy avoids inheritance tax as it never forms part of your estate. Inheritance tax is not an issue on estates passing between
spouses as these are automatically exempt of inheritance tax. However if can be an issue
if anything is being passed down to your children or to a friend.
Inheritance Tax is currently 40% and is charged on the portion of any chargeable estate which exceeds £285,000.
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