Why one simple mistake is costing Brits £100billion a year...

UK consumers risk losing nearly £100billion annually because their life insurance policies aren’t written in trust, it has been claimed.

This massive figure has been calculated by financial services company Legal & General.

Its study showed that 82% of consumers have assets they wish to pass on to loved ones in the event of a claim on a life insurance policy.

But 40% of them have never heard of placing their policy in trust.

Worryingly, it also emerged that 43% of consumers questioned said they don’t have a Will in place.

'Simple arrangement' 

A trust is a simple legal arrangement. A person with a life insurance policy can indicate who they want the proceed to be paid to and controls when the money from the policy will be paid out. 

Children or any other chosen beneficiary can receive financial support, but not have full access to the lump sum. 

Legal & General said writing a policy in trust should help to ensure that any money paid out from the life policy will not be part of the estate of the person covered, helping to minimise Inheritance Tax. 

It will also help to make sure that the money paid from the life policy can be paid to the right people quickly, without the need for lengthy legal processes.

Craig Brown, director at Legal & General Intermediary, said: “It’s certainly tempting to avoid thinking about the future, but it’s essential to remember our responsibility to our loved ones. 

"As this research shows, there is a genuine risk of leaving them exposed and vulnerable to financial difficulty unless people get their affairs in order beforehand.

"By speaking with an adviser and putting a life insurance policy in a trust or making a will, policyholders will have much greater security. 

"Knowing that their family will be covered in the case of unforeseen circumstances will not only give policyholders greater peace of mind, but will also ensure that their loved ones gain the maximum benefit from their insurance policy.”

How we can help

Wills are often straightforward, but some involve complicated arrangements and financial affairs, such as Inheritance Tax - all the more reason to ensure they are drawn up by a qualified solicitor. 

By offering property, legal and financial services together, Aberdein Considine can help you see the opportunities that others cannot. Our experts will work together to make sure that there is as little Inheritance Tax payable as possible thus leaving more for your beneficiaries.

So when planning your estate becomes difficult to navigate, let us be your map and compass. Click here to make an appointment with an adviser.

We are also hosting a free event in Glasgow where you can learn about protection your and your family's financial future. Click here to register.