Writing Life Insurance in Trust
Do you want to make the taxman’s day, when you die?
If your life insurance is not set up in trust, you could well do just that – by handing over a totally avoidable Inheritance Tax liability of 40%, payable on a large portion of your wealth!
However, as Independent Financial Advisers, we can set up your life insurance in trust, effectively putting it beyond the clutches of the taxman, and possibly saving you thousands, or even hundreds of thousands, of pounds!
Make an insurance enquiry about setting up your life insurance in trust or call 0800 678 5929
Writing a life insurance policy in trust is a simple procedure involving no more than filling in a form at the time when the life policy is being set up.
What is the meaning of in trust?
By setting up your life insurance policy in trust, you remove the life cover from your estate.
Your estate is your entire wealth, including insurances and savings, and less your debts and liabilities.
Inheritance Tax of 40% would normally be due on any part of the value of your estate which exceeds your Inheritance Tax allowance. Today (2010/11) the Inheritance Tax allowance is currently £325,000 for an individual and £650,000 for a couple.
This means that if an individual’s estate was valued at £425,000, taking away his allowance of £325,000 would leave £100,000, so that Inheritance Tax at 40% would give the taxman £40,000.
Applying a trust arrangement to your life insurance policy would clearly reduce the value of your estate considerably, and could avoid a large Inheritance Tax liability.
Find out more about Inheritance Tax here or call 0800 678 5929
Probate and ‘red tape’
Another advantage to placing your life insurance outside of your estate is that the policy payout avoids becoming ‘bogged down’ in the whole process by which solicitors establish probate after your death, and which can take from three months to three years.
The life insurance payout can therefore be made immediately, avoiding long delays for your family and ensuring their financial wellbeing at a difficult time.
Find out more now with an insurance enquiry or call 0800 678 5929
