The main benefits to your business of placing your life assurance plans in trust are as follows:
- It will make sure that in the event of a claim, the proceeds will be paid only to the people that the settlor wants to benefit from it. This will be the other business owners, so that they can buy the deceased owner’s share of the business from their family, therefore ensuring it continues to run smoothly.
- A death claim will usually be paid more quickly if the plan is in trust, as there will be no lengthy delays while the deceased’s personal representatives apply for probate to distribute the estate; trust funds do not form part of the deceased’s estate and can therefore be paid to the trustees without delay. Again, this will ensure your business can continue to run efficiently.
- There will be no immediate Inheritance Tax (IHT) liability on the claim proceeds, as they will not form part of the deceased business owner’s estate
