Telmar Estate Planning

Life Insurance Policies Written in Trust

A powerful way to protect your loved ones and reduce Inheritance Tax.

Placing a life insurance policy in trust ensures the payout goes directly to your chosen beneficiaries, outside of your estate, helping to reduce your Inheritance Tax liability.

Family protected by a life insurance policy written in trust
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Why Use Life Insurance Written in Trust?

Reduces IHT Liability

The policy payout is not included in your estate, helping to reduce Inheritance Tax.

Protects Your Loved Ones

Provides your beneficiaries with a financial safety net when they need it most.

Immediate Payout

Avoids delays — the payout goes directly to beneficiaries, not through probate.

Outside of Your Estate

When written in trust, the policy proceeds are held outside of your estate.

Complete Peace of Mind

Knowing your family are protected and your wishes will be followed.

How Life Insurance in Trust Works

  • We assess your needs and IHT planning goals
  • We recommend the right type and level of cover
  • The policy is written in trust for your chosen beneficiaries
  • You keep up to date with premiums
  • The payout is made directly to your beneficiaries, tax-efficiently
Adviser setting up a life insurance policy in trust for a family

Who Is It Suitable For?

Life insurance written in trust can be an effective solution for:

Individuals with Significant Assets

Help protect your estate and reduce IHT.

Parents & Grandparents

Ensure financial security for your children or grandchildren.

Business Owners

Protect your business and ensure continuity for your loved ones.

Property Owners

Help cover IHT on property portfolios or second homes.

Our Life Insurance in Trust Services

Expert advice and ongoing support every step of the way.

Needs Assessment

We assess your circumstances and IHT objectives.

Policy Recommendation

We recommend the most suitable policy and level of cover.

Trust Setup

We help establish the trust to keep the policy outside your estate.

Policy Management

We provide ongoing support to keep your policy on track.

Review & Adjust

We regularly review your policy and make sure it still meets your needs.

Claims Support

We guide your beneficiaries through the claims process.

Expert Guidance

Why Life Insurance Should Be Written in Trust

Keeping the payout outside your estate

A life insurance policy not written in trust usually pays into your estate, where it may be subject to 40% inheritance tax and delayed until probate is granted. Writing the policy in trust means the payout is made to trustees for your chosen beneficiaries, normally outside your estate. This can save significant tax and give your family access to funds within weeks rather than months. Trust payouts can also be used flexibly, for example to support children, settle a mortgage or fund school fees, according to your wishes and the discretion of the trustees you appoint.

Funding an inheritance tax bill

A whole-of-life policy written in trust, often on a joint life second death basis for couples, can be used to provide a lump sum to pay the expected inheritance tax bill. Premiums paid from surplus income or within the annual exemption are typically exempt. This approach protects the family home and investments from forced sales to raise tax within six months. Cover is usually based on a calculation of your projected liability, and should be reviewed periodically. Policies can be indexed to keep pace with rising estate values and changes to inheritance tax rules.

Choosing the right trust

Insurers provide standard trust forms, including absolute, flexible and discretionary trusts, each with different levels of control and tax treatment. Choosing trustees carefully, and reviewing them after life events, ensures someone can claim quickly. Telmar reviews existing policies, many of which were never placed in trust, and helps clients put the right arrangements in place for their family. Older policies, pension death-in-service benefits and mortgage protection plans are commonly overlooked. A short review can often secure substantial savings for your family simply by placing existing cover into an appropriate trust.

How We Work

Our Proven Approach

1

Policy Review

We assess your existing cover and identify the most appropriate trust.

2

Trust Design

We design a trust that matches your family situation and intentions.

3

Documentation

We prepare and witness the trust deed and notify the insurer.

4

Ongoing Review

We review the arrangement as your family and the rules evolve.

Get Expert Advice Today

Speak to our Inheritance Tax specialists about life insurance policies written in trust and how they can help your family.

  • 01329 550190
  • admin@telmarestateplanning.co.uk
  • 9 Pier Street, Lee-on-the-Solent, Hampshire, PO13 9LD

Frequently Asked Questions

Your Questions, Answered

It's a life policy whose proceeds are held in trust for chosen beneficiaries, outside your estate.
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Ready to Protect Your Future?

Book a consultation today and take the first step towards peace of mind for you and your family.

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