Should my life insurance be in trust?
Putting a life insurance policy in trust means the payout is held by trustees for the people you choose, rather than forming part of your estate. This can help the money reach your beneficiaries without waiting for probate, and may keep it outside your estate for inheritance tax purposes. Whether a trust is right depends on your circumstances, and the type of trust matters.
How a trust works
When the policy is written in trust, the trustees become responsible for claiming the money and passing it to the beneficiaries in line with the trust's terms. You choose the trustees and beneficiaries when the trust is set up.
Possible benefits
Because the payout does not normally pass through your estate, it may be paid more quickly and kept separate from your other assets. A trust can also give more control over who benefits, which can matter if you have children from different relationships or want to provide for a minor.
Inheritance tax
A trust may help keep the policy proceeds outside your estate for inheritance tax, but the treatment depends on the type of trust and your wider circumstances. Use HMRC guidance and professional advice for your own situation.
Things to consider
Some trusts are difficult to change once set up, so it is important to understand the terms. Make sure trustees know about the policy and where to find the documents. Many insurers provide trust forms, and an adviser or solicitor can help you decide which type is suitable.
This article is general information about UK protection insurance, not personalised financial advice. Policy terms vary between insurers and products, so always check your own policy documents.
Last updated 27 October 2026