Trusts

When you die, the courts must give permission for the assets in your estate to be given to your beneficiaries. In England they normally do this by issuing a document called a 'grant of probate.' This takes time and if you die without making a will it takes even longer. However, trustees do not have to wait for the courts so your life assurance can be paid out immediately. When you die, if your estate is worth more than a certain amount, inheritance tax may be due. If you do not place your life assurance under trust, it will become part of your estate which could increase the chance of inheritance tax being due. Putting your policies such as these under trust may mean that the beneficiaries will not have to pay inheritance tax on the proceeds.

By placing your assets under trust, you can ensure that your money is used as you intended. So, for example, if you owed money to creditors when you died you can ensure that any benefit from your life assurance would go to your beneficiaries - and not your creditors.

If you and your partner were to die leaving children under 18, the trustees could use the trust to support your children without giving them full access to the money. Once your children became adults, they could havhe money in the trust.