Here’ s why mortgage advisers should consider writing protection into trust as standard.
1. Faster access to the payout
A life policy not in trust usually forms part of the client’ s estate. That means the money may be tied up in Probate / Confirmation, a process that can take several months. In the meantime, surviving partners or family members could be left struggling to keep up with mortgage payments or facing the prospect of selling the property.
Putting the policy into trust ensures the proceeds go straight to the chosen beneficiaries without the need for Probate / Confirmation. That means faster access to funds at a time when clients may be emotionally and financially vulnerable.
2. Keeps the money out of the estate for IHT purposes
Even if your client isn’ t currently close to the inheritance tax( IHT) threshold, life cover not held in trust could still tip them over the edge, especially with rising property values and frozen tax thresholds. If you take the average UK property price, it’ s about £ 268,0001 and the current Nil Rate Band( NRB) sits unchanged in over 15 years at £ 325,0002- meaning someone’ s primary asset could be eating up 84 % of their tax-free threshold before even considering other assets.
A trust keeps the sum assured outside the estate, so it won’ t be included in the IHT calculation. That’ s a clear win for clients and their beneficiaries, and a strong demonstration that you’ ve considered the long-term financial impact of your advice.
3. Protects unmarried couples and blended families
It’ s increasingly common for clients to be in unmarried partnerships or blended families, where the legal next of kin may not be the person your client would want to benefit from their life cover. If there’ s no will and no trust, the law decides who inherits the estate, which may not match the client’ s wishes.
By writing the policy into trust, the client gets to choose exactly who receives the money. That’ s crucial for unmarried partners, children from previous relationships, or anyone financially dependent on the policyholder.
4. Delivers on the Consumer Duty
The FCA’ s Consumer Duty requires advisers to deliver good outcomes for clients, including in the event of a claim. A life policy that pays out late, goes to the wrong person, or creates a tax bill can’ t be said to meet that standard.
Writing the policy into trust shows that you’ ve thought about the full journey, not just the sale, but the claim. It helps ensure the protection actually protects and supports your compliance with the Duty.
5. Builds trust and adds value
Let’ s face it, most mortgage clients don’ t know what a trust is, let alone whether they need one. By introducing the concept and offering to help set it up, you’ re showing a deeper level of care and professionalism. That builds trust and strengthens relationships.
What’ s more, many providers offer online trust forms and some even offer simpler alternatives to using a trust in the first place, often referred to as contractual beneficiary nomination, so the process isn’ t as complex or intimidating as it once was.
A simple way to turn a payout into protection
At the point of sale, it’ s easy to focus on getting the policy on risk and moving on to the next case. But a few extra minutes spent discussing trusts can make all the difference to the client’ s experience at claim.
If you’ re recommending life cover alongside a mortgage, make trust discussions part of the conversation. It’ s better for your client, better for your advice, and better for your business.
Sources:
1 https:// landregistry. data. gov. uk / app / ukhpi /
2
Based on the 2025 / 26 tax year
August 2025 | 31