As part of your legacy planning it’s important for you to understand how your life insurance comes into play along with all your other assets.
Don’t have life insurance? It’s just easier for you to get in touch so we can help you get it together rather than reading below. View our contact details below.
Already have life insurance? Read on my friend, you’ll be glad you did!
Do I need to put my Life Insurance in Trust?
So off the rack all life insurances will automatically pay out to your Estate, now don’t panic, that’s not always a bad thing, for most people this needn’t be a worry. If your estate is below the nil rate band for Inheritance Tax then happy days, just leave it like that.
However, what we find is that most Mortgage or Financial Advisors don’t have the visibility across your assets to know if you are liable for Inheritance Tax; and because most of their clients won’t be over the threshold often they don’t even think to mention putting your insurance in trust.
Step 1: Calculate your Taxable Net Worth
Easier said than done right? Don’t fret, we have a great calculator that you can use to work that all out. You will find that here.
Need help? There’s a fab video introduction on what you need to do with the caluclator and why. If you’re still stuck our consultants can help.
Here’s the good news!
If you work with us (or anyone really) and you calculate that you are near or over the Nil Rate Band Threshold then it’s usually as simple as downloading a form from your provider and getting the right person to fill it in! Happy Days!
Step 2: Google your provider to see if they have a free template
So here are the things you need to Google to find out if your supplier has a free form on their website.
If you don’t find anything we suggest you give them a ring, no luck there… get in touch and we will point you in the right direction to get it all sorted.
Single Person Policies
If you have only life cover: [provider name] Discretionary Trust
If you have life and critical illness cover: [provider name] Discretionary Split Trust
Couple Policies
If you have only life cover: [provider name] Discretionary Survivorship Trust
If you have life and critical illness cover: [provider name] Discretionary Split Survivorship Trust
What else do you need to do?
Well, you have to sign and post the thing off! I am the WORST at doing things like this. I did my document back in June, filled it all in and then left it on the bench for the next time I saw my sisters.
By the time I found the envelope below all the other things that needed to leave the house it was August (almost September to be fair!).
It’s easily done, but please don’t put it off too long because 40% is a lot to be lost to tax when it really doesn’t need to be that way.
Get it DONE!
So there you go! A blog post that could potentially save your family thousands of pounds when you pass away and all for the cost of a stamp!
Did you follow through on this? Let me know how you got on… I mean if you did it in less than 3 months you did better than me haha!
Take care,
Vikki x
Chief Legacy Guardian ??
