Policy in trust

Writing a life insurance policy in trust means the policy is held in a trust for named beneficiaries. When a claim is paid, the money goes to the trust rather than into your estate, which can speed up payment and, in many cases, keep it outside your estate for inheritance tax purposes.

Two common benefits are avoiding the delay of probate, so beneficiaries can receive money sooner, and giving you control over who benefits. Setting up a trust is usually free when arranged alongside the policy, and many insurers provide standard trust forms.

A trust is not right for everyone, and the details depend on your circumstances, so it is worth understanding how it works before deciding. Once a policy is in trust, changing the beneficiaries is more involved than amending a simple nomination, so it pays to set it up thoughtfully.