With your Relevant Life trust, why can the employee be a potential beneficiary?
For protection policies only. This information is for intermediaries only. It mustn't be distributed to, or relied on by, customers.23 October 2019
With both our signature-free and paper Relevant Life trusts, the employee is listed as a potential beneficiary so that they can potentially receive any terminal illness benefit we pay to the trustees.
As our Relevant Life trusts are flexible, there are various continuation options available if the employee leaves the employment of their current employer. This includes the employee taking over the policy payments themselves. If they do this, the trustees should remove them as a potential beneficiary so that they're not caught by the gift with reservation of benefit rules. Before using any of these continuation options, it's important to make sure that the policy will continue to meet the employee's needs.
Trusts establish legal rights, obligations and entitlements and might have material financial and tax implications for the settlor, trustees and beneficiaries. Aegon UK isn’t authorised to provide legal or tax advice, so your clients should take their own legal and tax advice before setting up a trust, to make sure that it meets their requirements. Our trusts have been drafted for use by UK-resident and UK domiciled individuals.