Trust

In the UK, life insurance trusts provide different options to help with estate planning and offer valuable benefits. At Austin Friars, we understand the importance of securing your family's financial future, which is why we offer expert guidance on the various types of life insurance trusts available.

Let's break down the main types of life insurance trusts and what they offer:

Absolute/Bare Trust:

    • Beneficiaries have complete and immediate rights to the trust's assets and income.

    • Simple and flexible for giving specific beneficiaries their share without restrictions.

Discretionary Trust:

    • Trustees have the freedom to decide how to distribute assets and income among a group of potential beneficiaries.

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    • Provides protection against creditors and adjusts to family changes.

    • Good for providing for multiple beneficiaries, including minors, without giving direct control.

Interest in Possession Trust (IIP):

    • One beneficiary (the "life tenant") enjoys the trust's income during their lifetime.

    • After the life tenant's passing, assets go to another beneficiary, called the "remainderman."

    • Offers a stable income for one beneficiary while ensuring assets pass to others later.

Relevant Life Trust:

    • Created for relevant life policies, which offer death-in-service benefits to employees in small businesses.

    • Provides tax efficiency and avoids inheritance tax on the policy payout.

Flexible Trust:

    • Combines features of discretionary and interest in possession trusts, offering both flexibility and control.

    • Allows trustees to choose beneficiaries and distribute assets accordingly.

Putting policies in trusts removes the payout value from the estate, lowering inheritance tax. Trusts speed up distributions, avoiding probate delays and providing quick financial support. Trusts shield assets from creditors, preserving them for beneficiaries. Different trusts offer various levels of control, allowing personalized estate planning.

At Austin Friars, we are dedicated to helping you make informed decisions that protect your family's financial interests. Our team of qualified financial advisors can assist you in creating a trust that aligns with your goals, ensuring your loved ones receive the financial security they deserve. Contact us today to explore the options available and secure your family's future with a life insurance trust.