What a trust does here
Writing a policy in trust means the proceeds are paid to trustees for the intended beneficiaries rather than forming part of the estate. This may affect both the timing of payment and the estate's Inheritance Tax position.
It does not change the policy itself, the premiums or the circumstances in which the insurer will pay.
What it does not do
A trust is not a universal solution. It does not guarantee a tax outcome, protect assets from every kind of claim, or suit every family. Outcomes depend on the type of trust, how it is drafted, who is appointed and the circumstances at the time.
It is also not always easily reversed, which is why the decision deserves proper thought rather than a tick on an application form.
Questions worth asking before you decide
The right answer depends on family circumstances more than on the product.
- Who should benefit, and should that be fixed or left to trustee discretion?
- Who would act as trustee, and do they understand the responsibility?
- How would flexibility be preserved if family circumstances change?
- Which specialist should advise, given the legal and tax implications?
Sources and further reading