‘Writing in trust’ explained.

Writing your policy in trust is one way to keep your money safe from the taxman; doing otherwise can result in your money falling into the clutches of HMRC.

Under normal circumstances, if you die your life insurance forms part of your estate and may therefore be subject to inheritance tax. However, in many cases it is possible to avoid a huge whack of tax, if your policy is written in trust.

A trust lets you set aside an asset (in this case, your life cover payout) to benefit a specified person (or people) known as the beneficiary. A trustee (or trustees) then manages the asset until the beneficiary is intended to receive. It gives you greater control over your policy and speeds up the process of paying out.

Doing all of this is relatively easy. When you take out a policy, most include the option at no extra cost. If you know what you’re doing, you can DIY - but if not you can seek advice from a financial advisor or call 0800 612 8005 and speak to one of the team.