FOR ADVISERS ONLY

The gift trust

This is the basic type of trust for family protection or IHT planning as it helps to avoid probate delays and makes sure that the proceeds are paid outside of your client’s estate
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As the owner of the plan, your client can’t be the beneficiary.

A gift trust is available as a discretionary trust which means the plan holder can add to their list of discretionary beneficiaries at any time and the trustees have flexibility to make payment to any of these beneficiaries. It’s also available as a bare trust, which makes sure the beneficiaries are fixed.

The gift trust (jointly owned plans – survivor to benefit)

This trust is similar to the gift trust as it’s used for basic IHT planning. The main difference is that this trust allows the surviving plan holder to receive the proceeds if they’re still alive 30 days after the death or diagnosis of a terminal illness of the first life assured.

It’s usually only used with plans that pay out on death or terminal illness, as the trust doesn’t allow the plan owner to receive any critical illness benefit.

This trust is available as a discretionary or a bare trust.

Important note:
Please note this is a guide and shouldn’t be relied on as actual advice.

Last updated: 20 Oct 2016

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.