Cookie Use

Drewberry™ uses cookies to offer you the best experience online. By continuing to use our website you agree to the use of cookies. If you would like to know more about cookies and how to manage them please view our privacycookie policy.

Should Joint Life Insurance Be Put in Trust?

We have recently taking out Joint Life Insurance off the back of our first mortgage. Should this be put in trust? I am a little confused.

Question asked by Keith Godwin

How Life Insurance Works and the Benefits of Putting It in Trust

A Life Insurance trust is effectively a wrapper which distributes the benefit paid out from life insurance policy on the event of your death or diagnosis of a terminal illness.

Writing your life insurance policy into trust ensures any benefit payment does not form part of your estate or count towards your inheritance tax allowance.

Joint Life Insurance policies covering spouses on a first event basis may see less benefit from being set up in trust from a tax perspective as there is a spouse/civil partner exemption for inheritance tax.

This exemption often removes the need for a trust as there is usually no inheritance tax liability when assets transfer from one spouse to another.

However, there are two scenarios where a trust may be needed:

  • You both die at the same time
  • You have a joint life insurance policy on a second life basis.

Should you put your Life Insurance into Trust?

As the first scenario cannot be predicted and writing your policy in trust does not cost you a penny, we would recommend writing your plan into trust to avoid any probate delays.

There are also discretionary trusts available that are designed specifically for Joint Life i=Insurance policies that can also pay out to the second partner on request, if they survive at least 30 days after the first death occurs.

Drewberry can help

Trusts can add another level of complexity when setting up your life cover so please do not hesitate to get in touch if you want to discuss this further.

If you need any guidance we can help organise having your life insurance policy written in trust, just give us a call on 02084327333.

Drewberry set up our insurance and were really helpful and made it very easy. I was really pleased at how responsive they are and how friendly and easy they made the whole process. I am delighted to be working with them.

Tara Wavre
13/03/2019
Compare Top 10 UK InsurersTakes approx. 60 seconds

Or call us on 0208 432 7333

Compare Top UK Insurer Quotes Logos
Contact Us
Head Office & Pensions and Investments
Cannon Place
78 Cannon Street
London
EC4N 6HL
Personal Insurance & Accounts Payable
Telecom House
125-135 Preston Road
Brighton
BN1 6AF
Drewberry London Office MapDrewberry Brighton Office Map
Our Core Principles
  • 1You Come FirstWe are a client focused business who always aim to put you first.
  • 2We are ExpertsTo provide you with the best advice, we need to know our stuff!
  • 3We are HumanWe are real people with feelings who are here to help you.
  • 4We are ProfessionalProviding a 5-star service requires a professional approach to everything we do.
  • 5We are here to EducateWe don't believe in sales, we are here to educate so you can make informed decisions.