Putting life insurance in trust: faster payouts and IHT efficiency
It is free, it is quick, and it is one of the most overlooked steps in setting up life insurance: writing the policy in trust.
When a life insurance policy is written in trust, the payout goes to the people you choose via the trust rather than through your estate. That usually means the money reaches your family faster, because it does not have to wait for probate, and it is normally kept outside your estate for inheritance tax purposes.
For most people it costs nothing to set up at the point of taking out the policy, and the insurer provides the trust forms. Despite that, a large share of policies are still not placed in trust, often simply because no one explained the option.
It is not right for every situation, and the tax treatment depends on your circumstances, but for many families it is a sensible, no-cost improvement worth asking about.
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