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Answer

If you died with Life Insurance in place, normally the money would form part of your estate. This can become a problem if the total of your estate is higher than the current threshold for Inheritance Tax because anything over will be charged at 40%. Keeping the money out of your estate can become a large saving.

Putting a life insurance policy into trust is a way of moving the proceeds of the policy out of your estate, while making sure that the money is provided to the right people quickly.

More information on trusts

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