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It is always safest to have your Life insurance policies "Written
in Trust".
Then, if you were to die, the policy's proceeds would be paid quickly and directly to the person you intended and not be treated as part of your taxable estate. This also ensures that the Life Insurance payout avoids inheritance tax.
Inheritance tax is not an issue on estates passing between spouses
as these are automatically exempt of inheritance tax. However it
can be an issue when passing your estate down to your children or
to a friend.
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