A legal arrangement where pay-out money is held by trustees for named beneficiaries.
Writing a life insurance policy in trust means the pay-out is made to trustees for the benefit of named beneficiaries, rather than falling into the deceased’s estate. The two practical effects most people want are speed — trustees can claim without waiting for probate — and inheritance tax treatment, because a pay-out outside the estate is generally not counted when the estate is assessed. Most insurers offer standard trust forms at no extra cost. Trust decisions are legal arrangements, so the wording should be checked carefully before signing.