How the trusts work
A trust is a way of managing assets (such as money or investments). It’s a legal arrangement where someone (the settlor) puts assets into a trust and appoints a person or group of people (the trustees) to look after them, for the benefit of a group of people (the beneficiaries). There are various types of trusts, with different features and benefits.
Our Probate Trust
With this trust, there’s no need for the trustees to wait for probate. This means that the death benefit can be paid quicker when you die.
To set up this trust, you’ll need to take out one of our investment bonds first and then transfer it into the trust. If the bond is in joint names, then the trust must also be set up in joint names.
Once the trust is set up, the trustees have flexible access to the funds and can make payments from the bond as and when needed. This means that this trust won’t help you reduce any potential inheritance tax.
The trust will continue until the investment is given to the beneficiaries.
Accessing your money
With our Probate Trust, you can access your investment as and when you need.
A bare or discretionary trust?
A bare Probate Trust
With a bare Probate Trust, you are the only beneficiary. The donor (person setting up the trust) is not automatically made a trustee.
A discretionary Probate Trust
With this option, the trustees manage the trust at their discretion. This means they can make decisions such as who’ll benefit from the trust, how much money they’ll get and when. You are one of the potential beneficiaries.
Products that can be used with this trust
Income tax might need to be paid on any money withdrawn from an investment bond in our Probate Trust. The person who needs to pay the income tax will change, depending on whether the trust is set up as a bare or discretionary trust. If you need more information on tax, speak to your adviser.
When you die, the investment will be included in your estate and therefore in scope for inheritance tax.