Advisers are neglecting the benefits of writing protection policies in trusts and inadvertently cost...
Advisers are neglecting the benefits of writing protection policies in trusts and inadvertently costing clients thousands of pounds in inheritance tax, delegates were told
Despite the obvious advantages of writing term and whole of life policies in a trust, advisers are failing to offer them to clients because of perceived barriers, according to Julie Hutchinson, senior solicitor at Standard Life.
"As well as the obvious benefits of inheritance tax planning, trusts also pass ownership of the life policy over to the trustees, meaning that they can access the funds on behalf of the insured and can plan for themselves how an estate is distributed," said Hutchinson.
"A trust sits separate from other assets that are liable for probate and so a claim made on a policy in trust can increase the speed of access to the funds."
Harvey Briggs, national development manager at Standard Life, urged delegates to give serious consideration to using trusts more often in future. He claimed that the average time it takes for Standard Life to settle a life claim under trust is just three to five days, and surprised advisers by revealing that just 7% of policies processed at Standard Life are written in trust.
