Life assurance for husband. Do I need to put it in trust

foi1983

Hello

I am applying for life assurance with Aviva for my husband with me being the planholder and sole beneficiary.

They have also sent me the application form for putting it in trust but do I actually need to do that?

If I am the planholder and am stated as the beneficiary on the form why would the sum assured be subject to inheritance tax?

Also, can I be the beneficiary and a trustee for the trust? I though tthat the settlor can not be a trustee?

Can trusts be changed in the future as when we have kids, I would want to put some of the sum assured in trust for them?

Ta everyone!

magpiecottage

foi1983 wrote: »

Hello

I am applying for life assurance with Aviva for my husband with me being the planholder and sole beneficiary.


They have also sent me the application form for putting it in trust but do I actually need to do that?

No - the purpose of putting it into trust is so that it is not paid into a dead person's estate but presumably you will still be alive.

If I am the planholder and am stated as the beneficiary on the form why would the sum assured be subject to inheritance tax?

It won't

Also, can I be the beneficiary and a trustee for the trust? I though that the settlor can not be a trustee?

In English Law, the Settlor is automatically a Trustee - but if the policy is on their own life and only pays out on their death there is an obvious need for at least one more Trustee

Can trusts be changed in the future as when we have kids, I would want to put some of the sum assured in trust for them?

That depends on the Trust. It sounds like you might be better with a policy that your husband takes out (and pays the premiums for) under a Power of Appointment Trust.

You can then be a beneficiary AND a Trustee but would need an additional Trustee to increase reapply benefits payable to you post mortem. I recommend you speak to an Independent Financial Adviser who has passed either G10 or AF1 which are the two main Taxation and Trusts qualifications (they will not normally have both).

/QUOTE]

foi1983

magpiecottage wrote: »

foi1983 wrote: »

Hello

I am applying for life assurance with Aviva for my husband with me being the planholder and sole beneficiary.


They have also sent me the application form for putting it in trust but do I actually need to do that?

No - the purpose of putting it into trust is so that it is not paid into a dead person's estate but presumably you will still be alive.

If I am the planholder and am stated as the beneficiary on the form why would the sum assured be subject to inheritance tax?

It won't

Also, can I be the beneficiary and a trustee for the trust? I though that the settlor can not be a trustee?

In English Law, the Settlor is automatically a Trustee - but if the policy is on their own life and only pays out on their death there is an obvious need for at least one more Trustee

Can trusts be changed in the future as when we have kids, I would want to put some of the sum assured in trust for them?

That depends on the Trust. It sounds like you might be better with a policy that your husband takes out (and pays the premiums for) under a Power of Appointment Trust.

You can then be a beneficiary AND a Trustee but would need an additional Trustee to increase reapply benefits payable to you post mortem. I recommend you speak to an Independent Financial Adviser who has passed either G10 or AF1 which are the two main Taxation and Trusts qualifications (they will not normally have both).

/QUOTE]

Hello magpiecottage.

Just to clarify, my husband is the life assured and I am the beneficiary and policyholder.

My husband doesnt think he needs life assurance right now as his business is not doing well so according to him "life assurance is not a priority". I totally disagree so will pay the premiums for him and have no problem with that.

Regarding your first comment, yes I will be alive but my husband won't, so it will go into his estate as he is the life assured. Is that right?

Or does it mean that because I am the planholder, the life assurance is actually my asset and forms part of my estate. So if he dies the life assurance is mine as the planholder and no inheritance tax?

Thanks

foi1983

If the wife, I, am the policy owner and hubby is the life assured then the money isnt paid to any executor but paid to the owner, me. That speeds it up and I dont need a trust document.

Cheers

dunstonh

Regarding your first comment, yes I will be alive but my husband won't, so it will go into his estate as he is the life assured. Is that right?

No it wont. It will be paid to you outside of the estate as you are setting on the policy with you as owner and him as the life assured. There is no beneficiary named unless you put it in trust. The policy owner is the beneficiary.

yelf

The set up means that at present there is no need for a trust. But if you both die together, then the payout would be delayed by probate, meaning your estate could have difficulties.