A guide to trusts for your life insurance

Trust forms for your life insurance come in all different shapes and sizes and it’s important that you have the right one(s). At Caspian Insurance we are proud to say we have a dedicated team who specialise in all things trusts, so we will always provide the correct trust forms for your needs and can help you throughout the process of getting them sorted.

But just so you’re all clued up about some of the most common options, in this blog we will outline a few of the different types of trust forms that are available!

What is a trust form?

A trust form is a legal agreement in which you will determine who you want to receive the money from your life insurance policy if the worst were to happen to you. The main sections you will find on most trust forms are as follows;

• Beneficiary - This is the person or people you would like to receive the pay-out from your life insurance policy. You can choose who receives the money from your policy as well as how the money is split between your beneficiaries.
• Settlor - This refers to the owner of the policy. The settlor is sometimes referred to as the ‘donor’ or ‘policyholder’, but they all mean the same thing. So if you are the owner of the policy then you will put your personal details in this section.
• Trustee - A trustee is a nominated individual, over the age of 18, who will manage your trust. A trustee is usually the person who will make a claim on your policy if the worst was to happen and whose responsibility it is to ensure the proceeds are there for your beneficiaries.
• Witness - Being a legal document, each signature must be witnessed. Your chosen witness must be over the age of 18 and must not be named on your trust. This could be a friend, work colleague or even your neighbour.

There are several advantages to placing your policy in trust such as helping you to mitigate inheritance tax and avoid probate. If you want to find out how our trust team can help you and more about the benefits of placing your life insurance policy into trust then click here to read our latest blog all about our trust service.

Discretionary trust form

Most life insurance providers offer the option of a discretionary trust form and this is the form that our dedicated trust team will typically recommend.

A discretionary trust form gives you or your chosen trustees the option to make changes to your trust at a later date if needed, whereas other types of trusts may not give you the option to do this. Thus, if you decided you wanted to add or remove someone from your form in the future, then this trust gives you the flexibility to do so.

Bare or absolute trust forms

These types of trust forms are more set in stone than a discretionary form, meaning that you are typically unable to make any changes to the form once you have completed it. So you must ensure that when you are filling in your form, you are sure of the people you want to include into your trust.

Luckily, there is no time limit on when you need to complete your forms though so take as much time as you need!

Survivor’s discretionary trust

This trust form is typically useful for joint life insurance policies. This type of trust ensures that on death of one insured individual, the remaining survivor would be entitled to the pay-out from the policy. However, if both of the policyholders were to pass away within 30 days of each other then the nominated beneficiaries would likely receive the pay-out instead.

If you need any assistance filling out your trust forms, please call our trust team on 0161 241 6146 and press option 4 and they will be more than happy to help you.