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How to put life insurance in trust, step by step
To put life insurance in trust you choose a trust, trustees and beneficiaries, and complete your insurer's trust form.
Insurers provide their own forms (Aviva ↗), and Legal & General says its policies can be placed in trust at any time (Legal & General ↗).
Here is the process, in order.
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
How to put life insurance in trust: step by step
Aviva's first step is to make sure a trust is right for you, and to get independent financial and legal advice before going ahead (Aviva ↗).
A trust is a legal arrangement: once set up, you can't simply cancel it (Aviva ↗).
For a joint policy, both of you must agree to place it in trust (Legal & General ↗).
When the form is done, the trustees become the legal owners of the policy and keep the trust deed safe, and you carry on paying the premiums (Legal & General ↗).
Doing it when you buy is simplest.
Legal & General says it is a good idea to put a policy in trust at the outset (Legal & General ↗).
Step 1
Decide a trust is right for you
Think about who should benefit and when. Take legal and financial advice if you are unsure.
Step 2
Choose the trust type
Absolute (fixed beneficiaries), discretionary (trustees decide), flexible, or survivor’s for a joint policy.
Step 3
Choose your trustees
People who will make the claim and manage the money. With some insurers’ trusts you are a trustee too.
Step 4
Name the beneficiaries
Anyone you choose: a partner, children, relatives, friends or a charity.
Step 5
Complete the insurer’s trust form
Send the whole form. For a joint policy, both of you sign.
Step 6
Tell your trustees
They need the trust deed to claim. Keep paying the premiums.
Which trust type to choose
The choice is between certainty and flexibility.
Aviva says the differences largely come down to how much flexibility there is to make changes (Aviva ↗).
Legal & General suggests considering specialist advice before using its flexible trust (Legal & General ↗).
Choosing trustees and beneficiaries
Trustees can be family members, friends or a legal professional (Legal & General ↗).
They become legally responsible for the trust and must run it as you set out (Aviva ↗).
Aviva warns they have a duty to your beneficiaries and are personally liable for any loss to them (Aviva ↗).
Legal & General says there are no rules restricting who a beneficiary can be: a spouse or civil partner, a child, a relative, a friend or a charity (Legal & General ↗).
Existing policies, and registering the trust
An existing policy can often go into trust later: Legal & General says its policies can be placed in trust at any time (Legal & General ↗).
Aviva says you might need a financial adviser or solicitor for this, which might cost (Aviva ↗).
HMRC says transferring a policy to another person may be taxable as a gift at its value on that date (HMRC IHTM20012 ↗).
Registration. HMRC's manual says trusts of life policies are excluded from the Trust Registration Service during the life assured's lifetime, if the policy pays out only on death, terminal or critical illness, disablement, or for healthcare costs (HMRC TRSM23030 ↗).
After the person insured passes away, the exclusion lasts two years, giving the trustees time to distribute the money (HMRC TRSM23030 ↗).
Check the policy
Does it pay out only on the events HMRC lists?
Death, terminal or critical illness, disablement, or healthcare costs. Whole of life or term makes no difference.
If yes
Excluded while you are alive
The trust does not need registering during the lifetime of the person assured.
After a claim
Two years to pay out
The exclusion continues for two years after the person insured passes away, then registration may apply.
From HMRC's Trust Registration Service Manual, TRSM23030 (HMRC TRSM23030 ↗). Other assets or other kinds of policy in the same trust can end the exclusion.
Do I need a solicitor?
You complete the insurer's own trust form yourself (Aviva ↗), but both insurers we read recommend advice.
Aviva says to get independent financial and legal advice before going ahead (Aviva ↗), and Legal & General says you may wish to seek independent legal advice so the trust meets your objectives (Legal & General ↗).
Aviva adds that advisers may charge for their advice (Aviva ↗).
If you don't have an adviser, Aviva points to MoneyHelper to find a regulated one, and to the Law Society for a solicitor (Aviva ↗).
Situations where advice is worth paying for
- You want to put an existing policy in trust
- You are thinking about a flexible trust, which Legal & General says is more complicated
- Your family may change: an absolute trust can't automatically add a later child or a new spouse
- You are not married or in a civil partnership and have no will
- You also hold business policies on your life
Our list, drawn from points in Aviva's (Aviva ↗) and Legal & General's (Legal & General ↗) (Legal & General ↗) guides. Not a recommendation.
Run a business? There is a business version
Business policies come with their own trusts, not a personal trust form.
A relevant life plan is set up under trust from the start (Royal London ↗), and an own-life shareholder protection plan is held in trust for the other shareholders (Royal London ↗).
This site is mainly about cover a company buys, and the cards show who each policy pays.
- Pays the business
Key person life insurance
Cover the company owns on someone it relies on, so the payout goes to the business (Legal & General ↗). It needs no trust (Royal London ↗).
Read the guide → - Pays the family
Relevant life insurance
Life cover the company pays for on a director or employee, paid to their family through a trust (Royal London ↗).
Read the guide → - The full set
Business protection insurance
Key person, shareholder protection, loan cover and the director policies, side by side.
Read the guide →
Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- Legal & General: Putting life insurance in trust ↗Trust types, pros and cons, and what happens after set-up
- Legal & General: Your trust choices ↗Who is involved in a trust and the trusts it offers
- Aviva Trust for life insurance ↗Settlor, trustees and beneficiaries, and Aviva’s two trust forms
- Aviva: Putting life insurance in trust ↗Advantages, disadvantages and how to set one up
- HMRC Trust Registration Service Manual, TRSM23030 ↗When a trust holding a life policy does not need registering
- HMRC Inheritance Tax Manual, IHTM20012 ↗How life policies and their premiums are treated for Inheritance Tax
- MoneyHelper: What is life insurance? ↗Types of cover, joint or single, cost factors, trusts, buying and cancelling
- Royal London: relevant life is owned by the trustees ↗Set up under trust from the start, not a company asset
- Royal London shareholder protection ↗Own-life plans held in business trust for co-shareholders
- Legal & General key person insurance ↗Key person cover is owned by, and pays, the business
- Royal London relevant life FAQs ↗Relevant life: the employer pays, the family is paid through a trust
- Royal London business protection guide ↗Why key person cover needs no trust
Putting a policy in trust, answered
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.