Joint life, 1st death, need trust?

JayAitch

Hi,

My partner and I have just taken out a decreasing joint life assurance policy with aviva which will pay out on 1st death in order to clear the outstanding mortgage. The paperwork that came with it said that it may be advisable to put the policy in trust to avoid inheritance tax.

As it's a joint policy and we will not be having children, is there still a need to put it in trust seeing as the surviving policy holder will be the recipient of the payout? My thinking is that we don't, but would appreciate some input.

Thanks!

claretmatt

No need for trust benefits would go to surviving partner

ACG

would you have any preference for the money to be given anywhere should you both pass away in say a car accident?
If not then i woldnt worry.

CLAPTON

are you married or not?

kingstreet

As it's a straightforward debt repayment vehicle, it's probably not important as the sum assured and the debt cancel each other out. I hope it's a joint mortgage if you aren't married as there may be an issue with insurable interest.

magpiecottage

kingstreet wrote: »

I hope it's a joint mortgage if you aren't married as there may be an issue with insurable interest.

Insurable interest on a life policy only has to be demonstrated when it is first taken out. Once it is in force, there is no need to show it still exists at the time of a claim.

kingstreet

magpiecottage wrote: »

Insurable interest on a life policy only has to be demonstrated when it is first taken out. Once it is in force, there is no need to show it still exists at the time of a claim.

I thought that was the case, but wanted to check.