Level Term Assurance - issued under Trust?

sarymclary

I am trying to complete the forms for a Level Term Assurance Policy with L&G. The basic premise of this is a 17yr term, £300k sum, £18 p/month.

I have 4 children (aged from 6 to 15 yrs), and want to ensure they each receive a fair share of this amount (£75k) should I die before the youngest reaches early adulthood and has finished further education.

As a single parent there are certain issues I need to consider.

At the moment I am renting my house, but am hoping to be a home owner again within the next 10 years, so there will undoubtedly be a larger asset to include in my estate, hence considering the Trust option as wiser.

I think there is a good chance my children would have to be 'split up' in order to be cared for after my death (not a thought I care to dwell on, but I know it is realistic to consider), therefore, there may not be just one guardian who I could have oversee my estate. And in any case, what if these guardians chose to use the money from my estate to buy a larger house to take my children in? (In a previous will there was a clause giving the guardians the right to do this within reason). The money would be gone, and my children would effectively be left with no money from me, which is my reason for wanting to take out the policy in the first place.

Basically, can anyone comment about me choosing the Trust option? With the bit of info I've given you, would it, on balance appear to be a wise choice?

It was only the fact that the small print on my forms has said that 'A Trust cannot be cancelled, and it is your responsibility to ensure that the Trust Provisions meet your requirements.' that has prompted me to have any doubts.

I'm loathe to employ a Financial Advisor, as my last few experiences have been somewhat disappointing, and I'm loathe to line their pockets for what I felt was poor, inconsistent services (sorry to all you IFA's out there!)

I'd prefer to educate myself about the policies, even if it means trawling the internet for days on end.

Comments welcomed, if anyone has an opinion about my situation.

dunstonh

Single parent should always place the life assurance in trust. Otherwise you are just asking for 40% of the sum assured to go to the Govt in IHT.

I'm loathe to employ a Financial Advisor, as my last few experiences have been somewhat disappointing, and I'm loathe to line their pockets for what I felt was poor, inconsistent services (sorry to all you IFA's out there!)

There are over 30,000 advisers out there. Most of the UK never see an IFA but a tied agent. There are many business models. Some are salesforces, some are not. Some have been doing the roles for years, others just 5 minutes. You cannot measure the quality of all advisers on just a few.

sarymclary

Thank you dunstonh. That's exactly what I had imagined might happen, but I just needed someone else to confirm it for me.

I do realise that for every bad experience there must be a good one, but after having had 3 IFA's on the trot who were simply inept, to say the least (one just did a runner!), I feel lacking in confidence.

I'm off to fill out the 32 pages of my application then!:rolleyes:

dunstonh

I do realise that for every bad experience there must be a good one, but after having had 3 IFA's on the trot who were simply inept, to say the least (one just did a runner!), I feel lacking in confidence.

Every now and then I come across people that have used an IFA. Loads have used tied advisers but you have managed 3 IFAs? I suggest you keep away from the lottery with that luck.

silverfoxuk

Single parent should always place the life assurance in trust. Otherwise you are just asking for 40% of the sum assured to go to the Govt in IHT.


Is this the same for a family (couple with one child?).

Life Assurance £120k (joint life mortgage)
Family Income Benefit £1,500 per month (2 single policies each spouse)

I don't know whether I need to investigate putting these policies in Trust or not? Does it depend on my assets? Losing 40% of the payout to the taxman would be a serious blow to the beneficiarie(s)!