Life insurance provides vital financial support to your children when you are no longer there to care for them yourself. It is usual to assume that if you have put the correct insurance into place, your kids will have no financial worries at a time when money should be the last thing on their minds.
However, if your life insurance becomes part of your estate when you die, all the funds contained within it will be subject to probate. This could mean that your children have to wait up to six months to be able to claim the funds you have left them, even if the estate is completely uncontested.
Furthermore, if there are issues with the will or their claim is disputed, the time it takes for them to benefit from the arrangements you have made can be considerably longer.
Such a delay in payment could severely impact any member of your family. Consider how they will support themselves or continue with their own lives if they cannot access the funds that you have left for them.
In addition, any claim on the estate has to be made through a formal charge. Such a process can take further time but can also incur significant fees which eat into the nest egg that you thought was going directly to them.
Also don’t forget, any funds included within an estate are subject to inheritance tax. This means the total value of your fund could be eroded by as much as 50% before your kids even see a penny.
However, there is a quick and easy solution which solves all of these problems. All you have to do is fill in one simple form.
How to Place Your Life Insurance into Trust
By placing your life insurance into trust you can effectively ring fence the money that has been allocated to your family members.
It will protect them from long time delays before they are able to receive the money and will negate all probate fees. In addition, the funds contained within the trust will avoid your estate entirely and will therefore not be subject to any inheritance tax.
Simply by filling in the relevant form, you can directly nominate the people you’d like to receive the benefits from your policy. This will enable your beneficiaries to be paid, quickly and directly so that they receive all the benefits that you had intended for them.
Furthermore, this process should cost you nothing at all. Here at Insuranet we will offer this service completely free of charge. So if you are considering taking up life insurance, then ask us for your policy to be placed into trust for those that you really care about.
If you already hold an insurance policy, talk to your provider and ask them to send you the relevant forms so that you can make the arrangements now.
Putting your life insurance into trust is not difficult, time consuming or expensive but the difference it can make to your children is unforgettable.
To speak with one of our friendly advisers about life insurance and trusts, please call us on 0800 799 9330 or visit our life insurance comparison page here.
Useful resources:
The Law Society website explains the process of Probate – http://www.lawsociety.org.uk/for-the-public/common-legal-issues/probate/
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