L&G launches online trust hub

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Legal & General (L&G) has launched an online trust hub to simplify the process of setting up a trust for protection policy holders.

The hub will aim to help advisers identify a suitable trust for clients for both new and existing policies and create a deed in a few minutes.

Currently about 7% of L&G's life insurance policies are placed in trust, increasing the risk of Inheritance Tax (IHT) liability.

IHT is payable on any part of an estate worth £325,000 or over with a tax rate of 40%, with a trust the policy is paid to the trustees, and they share it with the beneficiaries, and it does not count as part of the estate.

Research for L&G suggested that in 2014 £530m of tax was paid in IHT from life insurance policies not placed in trust, an increase of £58m on 2013.

In October 2014 Aegon launched a whole of life plan with the ability to place the policy in a trust at application. 

Mark Holweger, managing director, intermediated at Legal & General Insurance said: "Putting life insurance policies in trust may be a good move in terms of financial planning for many customers - but it's something that is done by surprisingly few people.

"As the number one term assurance and critical illness cover protection provider in the UK, we recognise the importance of giving advisers the tools to make their client's aware of all the options available, allowing them to make an informed choice."

He added: "Legal & General's online trust hub is another way of keeping customers informed of all the options that are available to them.

"Given that currently just 6-8% of our protection policies are put into trust, there's a real opportunity here for advisers to make a significant difference to their client's IHT planning process."

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