Trusts

Speed of Payout

If the policy is written into trust, the trustee can make the claim and the proceeds will be paid straight away. If the policy is not written into trust, there could be a significant delay at the time when the money is needed the most.

Nomination of Beneficiaries

Clients often presume that the life policy proceeds will be paid out to their families in the event of their death. However if the plan is not written into trust, the proceeds will be paid into the deceased’s estate. How can they be sure the proceeds will end up in the right hands? When you are setting up a trust, you have control over who will administer any money paid out for the claim (the trustees) and who will benefit from any money paid out (the beneficiaries). This can avoid any disputes or delays in payment of proceeds. 

Simply writing the policy into trust and nominating the intended beneficiary on the Trust Form can avoid any disputes or delay in payment of proceeds.

Tax Planning

If not placed into trust, proceeds from a Life Policy will be added to the value of the Estate on death for Inheritance Tax purposes. By placing the plan in trust, some or all of the proceeds of the policy will be paid directly to the beneficiary and therefore may not be liable to Inheritance Tax. Please note, Vesta Financial Services Ltd does not offer advice on taxation matters. You should contact your accountant or other suitably qualified person to confirm whether this product is appropriate for your needs.