Got life insurance - can I / should I put it in trust?

buel10

Hi,
I have life insurance that will pay out £320,000 if I die within the next 23 years (I am 43). I have looked at putting the life insurance in trust. I have read up on this and cannot see any negatives, please can I ask if there are any I should look out for?

Sandtree

The main issue can be that changing the trust after it has been created may be difficult (and not all policies can be written into trust).

Depending on why you have bought insurance too... there can be some challenges if for some reason your original wishes cannot be fulfilled and the trustees have to determine what to do with the funds obviously in your absence. You by definition will be dead but you may still in theory "disagree" with their decision. Whilst it was a different situation (a death in service rather than life insurance) a former colleague died with a payout due to be administered by the pension fund trustees and the last nomination form had his then wife as the beneficiary however they were made aware he'd divorced her a decade ago with no kids and went on to remarry and had a young family with his current wife but never updated the nomination... was a lot of back and forwards on if the trustees should pay to the ex as per the 15 year old nomination form or pay his widow as most assumed he'd have wished but he'd never told the trustees

dunstonh

The only negatives are
1 - if you use the wrong type of trust.
2 - fail to set up sufficient trustees 
So, pretty easy to avoid those issues.