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QuickCover Life Insurance

Get peace of mind with our quick and easy life cover

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Putting your QuickCover Life Insurance policy into trust

There are different types of trust available and it may not always be clear which should be used so if you're in any doubt you should seek legal advice.

The information on this page shouldn't be taken as advice. Once you've put a policy in trust you can't change your mind later so you need to be really sure that it's right for you. If you're in any doubt, you should speak to a solicitor.

The basic facts of trusts

  • A trust is a legal arrangement that lets the owner of something 'gift' it to someone else. This could be shares, a home, cash, or a life insurance policy.
  • This is done by creating a trust deed which sets out the terms and conditions that the trust can operate under.
  • Normally, placing a policy in trust is an 'irrevocable' act. This means once the policy is in trust this decision can't be changed later on, so it's important to carefully consider if putting a policy in trust is right for you.
  • You can put a life insurance policy into trust as soon as it starts, or at a later date.
  • We offer two types of trust - fixed and flexible.

Advantages

  • Proceeds are paid to the right person/people.
  • Proceeds are paid out quickly; we won't need to wait for probate (which can sometimes take several months).
  • Helps avoid inheritance tax - the proceeds won't normally be included in the deceased's estate and can usually pass tax-free to whoever is chosen as beneficiaries.

Disadvantages

  • The policy can't be taken out of trust later on.
  • Control over the policy is given to the trustees so you can't make changes to it.
  • You can't benefit from the policy (this isn't usually a problem if you're the only policy owner but it can get complicated with things like joint life policies).

Who is needed to set up a trust?

There are three groups of people needed to set up a trust. These are the settlor, the trustees, and the beneficiaries. These are commonly used terms referred to in our trust deeds, and throughout our trust pages.

  • The settlor

This is the person or people who set up the trust, and put their life policy into it. So they are the current owners of the life insurance policy. The settlor chooses the trustees and decides who they would like the beneficiaries to be.

  • The trustees

These are the people responsible for looking after the policy put into trust on behalf of the person or people who will get the money when the life policy pays out – the beneficiaries.

  • The beneficiaries

These are the people who will get the money from the trust.

At LV= we have two types of trusts - fixed and flexible. Below are the differences between these two trusts:

Type of trust

Fixed

Flexible

Can the beneficiaries be changed later on?

No

Yes

Who are the beneficiaries?

Exactly who you name when you set it up.

You choose potential beneficiaries when you set up your trust. You also choose who should benefit if a claim were made straight away (the default beneficiaries). The trustees can pay trust funds to any of the potential beneficiaries.

What changes can the trustees make?

None

The trustees have the power to change the 'default beneficiaries' to any of your 'potential beneficiaries'.

Who decides how much each beneficiary gets?

You do when you set up the trust.

You do when you set up the trust, but the trustees have the power to change this.