What is a trust form and is it different from a will?

You may have heard of a will but do you know what a trust is?

Both a will and trust are important legal documents where you essentially dictate what you want to happen to your assets if the worst were to happen to you. But before we get into the nitty-gritty of these forms, let's take a look at the basics first.

A will is a legal document that sets out your wishes for what you want to happen to your property, possessions, and money. A trust is essentially a will for your life insurance as it ensures that the money from your policy goes to who you want it to if the worst were to happen to you.

Why do I need to put my life insurance policy into trust?

You do not need to put your policy into trust - it is completely optional. However, without the security of having your life insurance policy written into trust, the money from your policy could go into probate. Probate can take up to a year, so by writing out who you want to receive the money in your trust form, it negates potential delays in receiving the pay-out from your policy. So by not putting your policy into trust, the money from your policy could take longer to reach your loved ones.

Another advantage of putting your policy into trust is that you can mitigate inheritance tax, as once your life insurance policy has been placed in trust, the money is no longer included in your estate.

The important bits

In your trust forms, the first few pages are typically full of essential information and it’s crucial you read through this information before you get into filling in your form.

There are only a few sections that you will need to complete in your trust form. These might be terms you are unfamiliar with - let us fill you in.

• Settlor = This is typically the first section you will come across on the form. The settlor is sometimes referred to as the ‘donor’ or ‘policyholder’, which is referring to the owner of the policy - AKA you. So if you took out your life insurance policy to cover yourself, then you would write your details in this section.
• Trustee = This is the person/people who would look after your policy if the worst were to happen to you. They would ensure that if a claim is made on your life insurance policy, your provider is notified and the money gets to your beneficiaries.
• Beneficiary/ies = This is the person or people who you want to receive the payout from your policy. Not only do you decide exactly who the money from your policy goes to but you also dictate how the money is split between your beneficiaries.
• Witness = You will always need a witness to sign your trust form as it is a legal document. This person must be over the age of 18 and not already named on the form.

Is it difficult to complete your trust forms?

In short - no! Although they may contain some jargon, once you have gotten past this, you will find they all have the same key components as mentioned above and follow a similar layout across providers.

At Caspian Insurance, we have a team of trust specialists who are trained to help you navigate through your forms. Our friendly team of experts will run through everything with you over the phone, guiding you through the forms in real-time.

Additionally, you can also contact our trust team via text or email with any queries you may have about your forms, meaning you can go back and forth with your questions as much as you need to.

How is a will different from a trust form?

So now you know all about trust forms, let’s discuss what a will is. Here at Caspian, we don’t specialize in wills but we can tell you how it differs from a trust form.

A will is a legal document in which you set out your wishes on what you want to happen to your assets when you pass away. Unlike a trust form which dictates what happens to the proceeds from your life insurance policies, a will differs in the fact that it includes all of your assets and what happens to them, such as your property, money, and possessions. Additionally, it is always important to get your own legal advice when considering setting up your own will.

Therefore, not only can you have both a will and a trust form running alongside each other but we advise this as they both serve a different purpose.

Key takeaways

• A trust and a will are both important legal documents and it is crucial to be clued up on what they both are.
• Remember that your trust forms dictate where the funds from your life insurance go and your will sets out your wishes for what you want to happen to your properties, belongings, and money.
• At Caspian, our trust service is free of charge and available to all of our clients. There is no such thing as a silly question and no time limit on completing your forms. We provide you with free-post envelopes so that sending your forms back and forth is of no extra cost to you.
• 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.