Inheritance Tax & Death in Service Life Assurance

Death in Service Life Assurance schemes are often provided by employers, usually after a probation period, for the time you are in their employment. They are usually a multiple of salary. Death in Service benefits are paid out under the rules of pension death benefits and do not form part of your estate.  This means that the benefit is not paid under the terms of your Will. At some point when you began working for your employer you would have completed a nomination of death benefits form, requesting that benefits are paid to individuals of your choice.

If you have been employed by your employer for a number of years, it is possible that your personal situation will have changed somewhat. Speak to your HR department to update your beneficiary.

Death in Service benefits can amount to substantial amounts of life cover for your family.. If you have children (whether married or single) there are advantages to setting up a trust to receive these benefits in the event of your death. Trusts can provide protection against hostile creditors, which may threaten your assets in the cases of divorce settlements, bankruptcy and care fees. They can preserve the inheritance tax benefits for future generations.

Contact us for a Trust Fact Sheet providing more detailed information if you are:

  • Married/partner with children
  • Single with children
  • Married or single without children
  • You wish to speak with one of our advisers
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