Module 9 – Protecting Client Life Cover

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* 1. Q1 – Directing the death benefits of life cover into Trust is not required unless a client has an IHT exposure, true or false?

True

False

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* 2. Q2 – Which of the following is not true for life cover?

Clients can benefit from directing individual large policies into separate trusts.

Trust planning for single clients with life policies is not relevant as payments are tax free.

Trust advice for life cover is highly relevant to most legal partnerships.

Any value of life cover death benefits paid into trust will largely be tax free.

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* 3. Q3 – Life cover payments will only be made by a provider once probate has been granted true or false?

True

False

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* 4. Q4 – If an Assurance Trust receives a policy payment what options are open to the Trustees?

Trustees must close the Assurance Trust down or transfer to a new Trust within 2 years

The Trustees can consider investments, loans and advancement of capital at any time

Trustees must invest at least 50% of the Trust Fund for the primary beneficiary

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* 5. Q5 – Which of the following statements is correct?

It is not possible to replace a policy that has had the death benefits assigned to an Assurance Trust.

It is not possible to add an additional policy to an Assurance Trust.

Life policy planning into trust is highly beneficial for many clients to avoid the risk of paying unnecessary tax in the future

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* 6. Q6 – Single Life premiums are more IHT effective and protective for most legal partnerships true or false?

True

False

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* 7. Q7 – Which of the following statements is not correct about JLSD policy planning?

JLSD payments into a Trust may help beneficiaries to settle IHT payments prior to a Grant of Probate.

JLSD payments into a Trust may help beneficiaries to create legitimate tax benefits for themselves if a Trust is retained.

There are no benefits in putting JLSD policies into Trust.

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* 8. Q8 – There are no concerns regarding putting a terminally ill client’s life insurance death benefits into an Assurance Trust true or false?

True

False

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* 9. Q9 – True or false, High net worth clients can take a loan of life policy payments from an Assurance Trust and immediately pay a debt, gift or invest the assets into Trust

True

False

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* 10. Q10 – Which of the following statements is false?

An Assurance Trust is extremely limited in its ability to protect benefits if a partner remarries.

Local Authorities are highly unlikely to try and attack an Assurance Trust in pursuit of care fee contributions.

An Assurance Trust is flexible for use for blended family situations.

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