A trust allows a life insurance policy owner to gift the policy proceeds to beneficiaries upon their death. The owner, called the settlor, transfers ownership of the policy to the trust. Trustees, appointed by the settlor, then oversee the trust and ensure the proceeds are distributed according to the settlor's instructions. Beneficiaries are the recipients of the life insurance money. Establishing a trust provides estate tax benefits and allows faster payment of proceeds to beneficiaries.

1. TRUSTS - LIFE INSURANCE
WHAT IS A TRUST?
WHO’S INVOLVED & HOW DOES IT WORK?
A trust is a legal arrangement that allows you to gift the proceeds of your life
insurance policy to someone else.
For more information about putting your Life Policy into Trust, freephone
0800 211 8700 or visit www.supercontractors.co.uk
Contract Mortgages Ltd. Registered office: 1st Floor, 207 Bath Street, Glasgow, G2 4HZ. Company Registration Number: SC465654.
Registered in Scotland. Super Contractors is a trading style of Contract Mortgages Ltd which is an Appointed Representative of First
Complete Ltd which is authorised and regulated by the Financial Conduct Authority. Registration number 435779. Details of which can
be found by visiting www.fca.org.uk.
THE SETTLOR
THE TRUSTEES
THE BENEFICIARIES
The settlor is the person that gifts their life insurance policy. Once the settlor
has put their policy into trust they no longer personally own it, as it is now
owned by the trust. The settlor normally becomes the trustee automatically and
then chooses who else looks after the trust as well as the people who receive
the money from the trust fund.
3 KEY BENEFITS OF USING A TRUST
The trustees are the people you choose to look after the trust, make any future
claims, and arrange for the money to be paid to the people you wish to receive
it in line with your instructions. Once the policy is put in trust, the trustees take
legal ownership and can only do what is allowed in the trust deed. As the
settlor, you’ll become a trustee automatically. You will also pay the insurance
premiums.
The beneficiaries are the people (or person) who you want to receive the money
from the trust fund. This could be a partner, your children or even your
grandchildren.
TRUSTS SHOWDOWN
NEXT STEPS
You specify who your
beneficiaries and who your
trustees are. You will also
normally be one of the
trustees, so you can work
with others to ensure the
money goes to the right
people.
TOTAL CONTROL
If your life policy isn’t held
in trust, it will normally be
considered part of your
estate. Putting it in trust
will mean it could be
exempt from inheritance
tax, increasing the amount
of money passed on to
your loved ones.
INHERITANCE TAX
MITIGATION
Money paid out from your
life insurance can be paid
to your beneficiaries
faster, without the money
being held up in the estate
waiting on lengthy legal
processes.
FASTER PAYMENT
The simplest form of
trust. Once you have
written it, it cannot be
changed. The assets
can be received by the
beneficiaries at any
age (even if they’re
under 18).
absolute trust:
Non-Discretionary
absolute trust:
Discretionary
Split trust
This trust relies on
the discretion of the
trustees. The trustees
can retain assets until
they think it is the
right time for them to
be distributed to the
beneficiaries (eg. once
they’re over 18).
Allows the settlor to
split their life plan
so that they retain
some of the benefits
and some are put
into trust.
 X
 X
VS VS
CAN ADDITIONAL
BENEFICIARIES
BE ADDED /
REMOVED?
(e.g If settlor has
more children /
grandchildren or
falls out with
someone)
CAN BE USED
WITH OTHER
PLAN?
(e.g Income
Protection, Critical
Illness Cover)
WHAT IS IT?