IHT trust for pension/life insurance
Discussion
Late thirties. 2 young kids. Between us, my wife and I have assets over £1m, largely as a result of (1) pensions, and (2) life insurance. Without these, we'd be under £1m.
Assuming we want to leave everything to our kids, is it worth setting up trust(s) for these?
Benefits as far as I can see: (1) avoid IHT (becomes more of a factor as we get older and as pensions continue to grow), (2) allows us to pass on to our kids when they reach a certain age. Downsides: cost (?), and only useful of we both die (unlikely hopefully).
Am i thinking about this the right way, and what am I missing?
Assuming we want to leave everything to our kids, is it worth setting up trust(s) for these?
Benefits as far as I can see: (1) avoid IHT (becomes more of a factor as we get older and as pensions continue to grow), (2) allows us to pass on to our kids when they reach a certain age. Downsides: cost (?), and only useful of we both die (unlikely hopefully).
Am i thinking about this the right way, and what am I missing?
OM98 said:
Late thirties. 2 young kids. Between us, my wife and I have assets over £1m, largely as a result of (1) pensions, and (2) life insurance. Without these, we'd be under £1m.
Assuming we want to leave everything to our kids, is it worth setting up trust(s) for these?
Benefits as far as I can see: (1) avoid IHT (becomes more of a factor as we get older and as pensions continue to grow), (2) allows us to pass on to our kids when they reach a certain age. Downsides: cost (?), and only useful of we both die (unlikely hopefully).
Am i thinking about this the right way, and what am I missing?
You don t reference property ownership or equity, however If one of you were to pass then the life insurance could be used to clear a mortgage and between you you d be able to pass a million to your kids that way.Assuming we want to leave everything to our kids, is it worth setting up trust(s) for these?
Benefits as far as I can see: (1) avoid IHT (becomes more of a factor as we get older and as pensions continue to grow), (2) allows us to pass on to our kids when they reach a certain age. Downsides: cost (?), and only useful of we both die (unlikely hopefully).
Am i thinking about this the right way, and what am I missing?
Edited by bennno on Wednesday 17th September 10:25
dalenorth said:
Don t pay for the life policies to be placed into trust. Drop me a pm and we will do it for you. Solicitors can charge up to a grand for a simple form.
Thank you! Do you think putting them into trust os the right move? I don't actually want to change to a new provider since both of us have policies through our employers. Life insurance is usually fixed term as opposed to assurance which pays out whenever you die.
Not sure which OP has as he’s used both terms.
Equally not sure what type of Pensions he is talking about.
As stated already either form of Life cover though can be put into “Trust “by the Provider without even going to a third party - the forms are pretty simple and foolproof.
Not sure the same is true of other “ usual “ assets in terms of putting into Trust given how complex that can be and certainly wouldn’t want to do that without expert assistance.
If it were simple to avoid paying any IHT then presumably everyone would do it.
Not sure which OP has as he’s used both terms.
Equally not sure what type of Pensions he is talking about.
As stated already either form of Life cover though can be put into “Trust “by the Provider without even going to a third party - the forms are pretty simple and foolproof.
Not sure the same is true of other “ usual “ assets in terms of putting into Trust given how complex that can be and certainly wouldn’t want to do that without expert assistance.
If it were simple to avoid paying any IHT then presumably everyone would do it.
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