Death Benefit Trust

Death benefits are a sum of money, usually funds in a pension or life policy, which are payable when the policyholder dies. Trusts are advantageous because money transferred into a trust will not contribute to the policy holder’s estate for inheritance tax purposes. The death benefit trusts available vary and it is essential to find a trust to suit you. Our experts can work with you and your family to analyse your individual needs and to identify a trust structure to benefit your circumstances.

The tax system for death benefit trusts is varied and complex. Therefore it is beneficial to consult with an expert to ensure your compliance and to mitigate tax liability. We offer sensitive client-oriented services to reassure your family and safeguard their interests. The most common types of trusts for death benefits are discretionary trusts and life interest trusts.

 

Discretionary Trusts – Discretionary trusts are flexible trusts, designed for policyholders who are unsure whom they want to benefit from the trust. The chosen trustees have complete control over benefits given to the beneficiaries. Additionally, the beneficiaries are not legally entitled to receive any benefit. The policyholder can also give trustees power to add or remove beneficiaries at a later date.

 

Life Interest Trusts – These trusts are more specific and are recommended when the policyholder knows whom they want to benefit from the trust. They give a particular beneficiary (the life tenant) the legal right to receive income from the trust. Trustees can be given the power to partially or entirely reallocate the life tenant’s benefits.

Benefits of having a

death penalty trust

  • The policyholder has more control over their money. Without a trust, control of the funds would lie with your beneficiaries which in many cases include minors. By setting up a trust, you can appoint trustees to control and manage money on behalf of any beneficiaries.

  • They are tax efficient, so if you have multiple pensions, it can be beneficial to set up your pensions in different trusts to mitigate tax liability. Each trust will have a nil rate band which is currently £325,000 in the UK. Therefore, in each trust funds up to this total should not be liable to inheritance tax.

Image by Aurélien Lemasson-Théobald

The services we offer include:

  • Professional advice when choosing a suitable trust

  • Setting up the trust

  • Bookkeeping for the trust

  • Producing annual trust accounts and statements

  • Producing and submitting trust tax returns

  • Preparing tax certificates

  • Independent trustee service

  • Distributing funds to beneficiaries

How we can help

At More Group, our experts can work with your family to help ensure your financial needs are met. Our clients feel reassured that their family finances are handled by an experienced professional. The service we offer is confidential, efficient and reliable. We work closely with our clients to ensure the trusts set up will secure the maximum benefits for their unique circumstances. Contact us today to find out more about how we can help secure your family’s financial future.

Need help for a Death Benefit Trust?

Call us on +44 (0)20 7648 8950 

 

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