Life insurance in a trust...

[SnowBells]

Is it true that if you put a joint life insurance in a trust, neither party in the life insurance is allowed to benefit from the trust? We have taken out life insurance to cover the mortgage, and wanted to put it in a trust due to otherwise inheritance tax applying.

Does it mean this is not possible?

If it is to cover a mortgage then inheritance tax won't come into it because it is paid on the estate after debts have been paid.

If it is to cover a mortgage then inheritance tax won't come into it because it is paid on the estate after debts have been paid.

I thought that joint life insurance the amount was paid directly to the other person i.e. it doesn't touch your estate for inheritance tax purposes.

We have joint life insurance, also have a mortgage which I didn't take out life insurance for as existing policy more than covered mortgage amount so not sure if that makes a difference.

Well, I saw wording that trusts don't pay out to a person on the document. Fine if it's a single life insurance (you're dead!) but complicated when it's joint...

P.S.: This is not just for life insurances itself, but the ones 'put in trust'.