Life policies
Aside from such products, what other assets can a client use?
“Life assurance can also be used to either meet or reduce a prospective IHT bill, suggests Mr Whitcomb.
He says: “It is important that the policy is written in trust so that the proceeds of the life assurance policy will not be included in your estate when you die.”
Tracy Crookes, financial planner at Quilter Private Client Advisers, says:“Taking out a life policy that will pay out in the event of death can help but only if you write the policy proceeds in trust.
“If life cover is paid out on your death and you are the owner of the life assurance policy, this payment increases the value of your estate (under current legislation). However, if you write the proceeds in trust, they don’t go into your estate on death but are held within the trust for your intended beneficiaries.
“This provides the monies to pay the [IHT] bill without having to sell assets out of the estate.”
Victoria Ticha is a features writer at Financial Adviser and FTAdviser.com
