What if I already have plans, not written in trust?

​In this instance we may be able to help you arrange the trust for the policy.  It will depend on the provider and the age of the policy. 

​If you would like to discuss your existing planning, then please contact us and we can look into this for you. 

Please note that there may be a nominal charge to arrange a trust for you and this will be discussed with you if and when it becomes appropriate.  This is purely to cover our time in dealing with the matter for you.

Types of Trust

There are many types of trust but the 2 main ones we use with our customers are: 

- Absolute Trust

- Discretionary Trust 

An absolute trust is a simple trust where you set out who you want to benefit from the funds in the event of your death, and this will never change. We use this rarely due to the limitations it presents but for some people this is the right thing to do. 

A discretionary trust can have named beneficiaries, but also allows for your trustees to have some flexibility in how they manage your funds.  This has benefits in case one of the beneficiaries has died or if your circumstances had changed. 

A good example of this is where you might name a child as a beneficiary but in the future you wanted the money to go to your grandchildren.  A discretionary trust would allow for your wishes to be taken into account and an instruction to your trustees could be made to make this arrangement. 

There are many other factors to consider and therefore we strongly recommend that you contact us first before making any decisions as to whether a trust is right for you.

What is a trust?

A trust is an arrangement, defined by law, where someone or a group of people are made responsible for assets for the benefit of another group of people.

Clear as mud.... let us explain how trusts can be used to benefit you.  As protection specialists, we will focus on life insurance trusts.

How XL Financial Services use trusts

For a lot of people the most important issue with an insurance plan is timing.  If you are unfortunate to suffer the loss of a partner, life continues and bills need to be paid.  

However, if often takes several months to deal with the formalities before the estate and assets are available to the family.  

In addition, there may not be a will and in this case it can take even longer to be given a letter of administration by the courts, in order to make a claim.

This all delays the ability to claim on the life insurance.  This is where a good trust would be helpful.

If your life policy had been written in trust, then the life company can pay the proceeds directly to the trustees named on the policy and this avoids delays in getting the money to the right people at the right time. 

There are other benefits to you, including inheritance tax planning. However we view the above to be one of the key factors in looking at trusts with our customers.

If you would like to learn more about the benefits of trusts, then please contact us to find out more.​​

​How does it work?

The main people involved in a life insurance trust are the settlor, the trustees and the beneficiaries.

The settlor is typically the person who sets up the trust, but will always be the life insured. In Scotland the settlor is sometimes called the ‘truster’ or ‘granter’. 

The creation of most trusts normally involves drawing up a trust deed which sets out what property the trust will hold, who will be the trustees, who will benefit under the trust, the powers of the trustees and the rights of the beneficiaries.

The trustees look after the trust fund in accordance with the trust deed and hold the funds in their name for the benefit of the beneficiaries.

Trustees have a duty of care and must act in a way that an ordinary prudent business person could be expected to act. The trust deed may give the trustees wide powers to distribute the income and assets of the trust, or it may have very precise rules and leave the trustees little or no discretion.

The trustees are generally responsible for the trust’s accounts and tax affairs.

The beneficiaries are the people for whom the property is held under the trust. A beneficiary may be entitled to all the funds, or just some of them, or just an aspect of them, e.g. the interest on the funds in the trust or possibly the capital at some point in the future.

In particular, their entitlement may be set and clear or the trustees may have some discretion about what, if anything, particular beneficiaries might receive from the trust.


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Reviews and Ratings for Financial adviser Mark Davis, Taunton

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Reviews and Ratings for Financial adviser Mark Davis, Taunton