Jamie Lennox - Mortgage Adviser - Dimora Marketing

5 Reasons to put your life insurance in Trust

reasons to put your life insurance in trust

If you live in Norfolk, England, and are considering purchasing life insurance, it’s important to consider putting your policy into a trust. A trust is a legal arrangement that allows you to set aside assets for the benefit of specific individuals or causes. When it comes to life insurance, putting your policy into a trust can offer a range of benefits, both for you and your beneficiaries. In this blog post, we’ll explore the reasons why you should consider putting your life insurance in trust.

  1. Avoiding inheritance tax

Inheritance tax is a tax on the value of your estate when you die. If the value of your estate, including your life insurance policy, exceeds the current threshold of £325,000 in England, your beneficiaries may have to pay inheritance tax on the amount that exceeds this threshold. By putting your life insurance policy into a trust, you can help reduce the value of your estate and potentially avoid or reduce inheritance tax.

  1. Providing for your loved ones

When you set up a trust, you can specify who the beneficiaries are and how and when they should receive the benefits of the trust. This means that you can ensure that your loved ones are taken care of in the way that you want after you’re gone. For example, you can set up a trust that pays out a regular income to your spouse or children or provides a lump sum payment for a specific purpose, such as paying for a child’s education.

  1. Avoiding probate

When you die, your assets, including your life insurance policy, will need to go through probate, which is the legal process of distributing your assets according to your will. This can be a lengthy and expensive process that can tie up your assets for months or even years. By putting your life insurance policy into a trust, you can avoid probate and ensure that your beneficiaries receive the benefits of your policy more quickly.

  1. Protecting your assets

When you put your life insurance policy into a trust, the policy is owned by the trust, not you. This means that the policy is protected from your creditors and cannot be used to pay off your debts or legal obligations. This can be especially important if you own a business or have other assets that could be at risk in the event of a lawsuit or bankruptcy.

  1. Flexibility

Setting up a trust can provide you with a high degree of flexibility when it comes to how your assets are distributed after you die. For example, you can specify that the trust pays out a lump sum to your beneficiaries or that it provides a regular income. You can also specify conditions for the payout, such as minimum age or level of education, or stipulate that the trust pays out over a certain period of time.

In conclusion, there are many good reasons to consider putting your life insurance policy into a trust in Norfolk, England. By doing so, you can help reduce inheritance tax, provide for your loved ones in the way that you want, avoid probate, protect your assets, and enjoy a high degree of flexibility. If you’re considering setting up a trust, it’s important to consult with a professional advisor who can help you navigate the legal and financial aspects of the process.

Share this post with your friends

Subscribe to our Newsletter

The mortgage landscape can feel like it’s changing at a million miles per hour. Subscribe to our news letter to keep up to date with these changes.

Our previous blogs...

Inflation slow to 2%

UK Inflation Hits Bank of England’s 2% Target in May 2024: A Surprising Turn of Events Inflation in the UK has finally hit the Bank of England’s (BoE) target of 2% in May, marking the first time in three years that this milestone has been achieved. Prime Minister Rishi Sunak,

Read More »
General election and impact on mortgages

General Election: What Does It Mean for Mortgages? Ah, general election season! That thrilling time when political dramas unfold, promises are made, and uncertainty looms like a dense fog over the financial landscape. For homeowners and potential buyers, one pressing question often comes to mind: how will the general election

Read More »
£5000 deposit mortgage

The £5000 Deposit Mortgage Revolution: A Beacon of Hope or a Mirage? In a world where the idea of owning a home feels more like a pipe dream for many, the recent announcement by Accord Mortgages is akin to spotting an oasis in a desert for first time buyers. Offering

Read More »

Want to see how we can help you?
Get in touch below...

You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with GDPR May 2018 requirements. You agree that such information may be used to provide you with details of services and products in writing, by email or by telephone. By submitting this information you have given your agreement to receive verbal contact from us to discuss your mortgage requirements. 

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.

Dimora Mortgages Ltd (Company Number 13004223). Registered in England & Wales

Registered & Trading Address: 7 Hobart Drive, Little Plumstead, Norfolk, NR13 5FS

Dimora Mortgages Ltd is an appointed representative of PRIMIS Mortgage Network, a trading name of First Complete Limited which is authorised and regulated by the Financial Conduct Authority. (943407) 

Your home may be repossessed if you do not keep up repayments on your mortgage.

For our mortgage advice services, we will charge a fee of between £0 and £450. The exact amount will depend on the type of application we are proceeding with.
However, the exact amount will be confirmed at the earliest possible convenience.

time to book a mortgage appointment?

Click the link below to book in with one of our expert advisers