Aegon UK has launched a new discretionary trust form aimed at making it quicker and easier for advisers and their clients to place personal protection and whole of life policies in trust.
The new discretionary trust form can be signed electronically by all settlors and trustees typing their names rather than having to sign using a pen.
Aegon says it has streamlined the process to create its discretionary trust, both at initial set-up stage with a clients’ protection application and if assigning an existing policy into trust.
A split trust is used meaning only life protection and terminal illness benefits will be held in trust for beneficiaries, enabling clients to retain access to claim proceeds for benefits such as critical illness cover, income protection and any associated benefits, the insurer said.
In the event a joint-life first death policy is placed into the discretionary trust, a survivorship clause will automatically apply meaning any claim proceeds payable after one insured person dies will be paid for the benefit of the surviving insured person, as long as they survive for 30 days.
Aegon has also created a new guide for advisers to use with their clients to help explain the trust and the process for setting one up.
Stephen Crosbie, protection director at Aegon, said as just one in five of the insurer’s protection policies were currently held in trust, many people could be missing out on the valuable benefits that trusts bring.
“Avoiding the need for a Grant of Probate to speed up payment of a claim and the associated inheritance tax savings are two benefits of having a policy written in trust,” he said.
“With the rise in remote working, our new discretionary trust lets advisers and their clients complete a trust electronically, without the hassle of wet signatures, to provide peace of mind that their policy will pay the right people at the right time.”
