Trust Owned Insurance Agreements

Trust Ownership pursuant to a Trust Owned Insurance Agreement will:

  • overcome the limitations referred to above for Self Ownership where the real owner is a related entity of the life Insured (such as a Company or Family Trust);
  • preserve the CGT exemptions for both Death Benefit  and Non-Death Benefits;
  • enable the insurance proceeds to be distributed to a number of different parties (for example, the Related Entity Owner  and a Bank or other Creditor and not just the Life Insured and their Estate);
  • allow the owners to maintain a single policy of insurance relating to both business and personal cover for a Life Insured; and
  • Allow the parties to vary the agreed directions relating to the distribution of any future insurance proceeds as their circumstances change without the need to change numerous different policies through their insurer (for example, where business debt is paid down Debt Reduction Cover could instead be directed to be paid towards any increase in the value of the owner’s equity in the business and/or to the Life Insured personally as top-up personal cover).

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Sam Roberts