Making trusts even easier for you and your clients

Published  13 July 2023
   5 min read

Whether or not a client’s plan should be written in trust is something every adviser should consider. It could be argued that trusts are one of the most important financial planning tools at your fingertips.

After all, if a policy is written in trust, it remains outside of a client’s estate, which can help to mitigate a potential Inheritance Tax (IHT) charge on death.

But even if IHT isn’t playing on your client’s mind, trusts can also be useful in making sure the plan benefits are paid to the right people as quickly as possible.

This becomes particularly useful if a client dies without a will. In this case, any potential beneficiaries need to wait for Probate (or Confirmation, if you live in Scotland) to be granted before receiving access to an estate, which would include any life insurance benefits. This is often a lengthy process that on average takes 9 months1. Additionally, the rules of intestacy also take effect in this situation, meaning multiple surviving relatives could be eligible to receive the payout from a claim. However, if the policy is written under trust, then any benefit can be paid to the surviving trustees - and distributed to the named beneficiaries - as soon as the claim is settled.

So, with the new Consumer Duty rules setting out the requirement for adviser firms of all sizes to measure whether they’re delivering good outcomes for clients, it could be beneficial for you to talk to clients about whether writing their plan in trust could offer them further value, and result in a better long-term outcome. 


An online, signature free process

To save any issues in the case of a swift claim, it’s often best for a plan to be written in trust at the application stage, rather than waiting until it’s on risk. After all, once a plan is up and running and clients feel protected, they may start to lose momentum regarding any further steps to strengthen their financial position.

But we understand that during the protection conversation, when clients may be reluctant to complete further ‘paperwork’, it makes sense to have the option to create trusts online.

That’s why with our Personal Menu, Business Menu and Relevant Life Plans, we give you and your clients the option to complete an online trust during the online application process - completely signature free.

For all of our online trust options, the process is straight forward. We capture the trust information as part of the online application, removing unnecessary additional paperwork at this stage, and saving you and your clients’ time.

Once you've submitted the application, we'll automatically send confirmation to the plan owner and nominated trustees. And you also get a digital copy of the completed trust document to keep on your adviser dashboard.

But of course, if this online process doesn’t suit a client’s needs, our traditional paper trust forms remain available for any applications, or for any trusts you wish to submit after an application has been accepted.

Nevertheless, when it's easy for you to write your clients' protection plans in trust, you can make sure their payout ends up in the right hands, at the right time - and show the value of your advice.

To find out more about how we can support you and your clients, visit our website.