Can I take a policy back out of trust after setting it up?

It depends on the type of trust. An absolute trust is generally fixed once set up, while a discretionary trust gives trustees more flexibility. Choose the right type at the outset and take advice if unsure.

Do I need a solicitor to put a policy in trust?

Not usually for a simple term policy going into the insurer's standard trust, you can do that with the provider. Advice from a solicitor or financial adviser is worth it for large estates, policies with a significant cash value, complex family situations, or a bespoke trust.

Trusts

Can I put an existing life insurance policy into trust?

Q: Can I put an existing life insurance policy into trust?

Yes, in most cases. An existing life insurance policy can usually be placed into trust at any time after it has started, not only when you take it out. You ask your insurer for their trust form, choose trustees and beneficiaries, and return it. For a standard protection policy this is normally free.

Q: Does it cost anything to put an existing policy in trust?

For a standard protection policy it is usually free, using the insurer's own trust deed. A solicitor may charge a modest fee if you want a tailored trust, which is more common for larger or more complex estates.

Guide · Updated September 2026

Short answer: yes, in most cases. You do not have to decide at the start. An existing life insurance policy can usually be placed into trust at any time after it has begun, and for a straightforward protection policy this is normally free. You ask your insurer for their trust form, choose your trustees and beneficiaries, and return it.

Putting a policy in trust keeps the payout outside your estate, so it is not caught by the 40% inheritance tax charge, and it usually reaches your family within days rather than waiting months for probate. Many people take out cover without being told this, so moving an existing policy into trust is a very common tidy-up.

How to do it, step by step

Contact your insurer or broker. Ask for their standard trust form for an existing policy. Providers usually have a ready-made deed, sometimes called a "deed of assignment into trust".
Choose your trustees. These are the people who will handle the payout and pass it on, often your partner, a relative or a close friend. It is wise to name more than one. You are usually a trustee too.
Choose your beneficiaries. The people you want the money to reach.
Pick the type of trust. Providers typically offer an absolute trust (fixed beneficiaries, simple) or a discretionary trust (trustees decide later, more flexible). More on this below.
Complete and return the form. The insurer records that the policy is now held in trust. Keep a copy with your important papers and tell your trustees where it is.

Cost: for an ordinary protection policy this is usually free, the insurer provides the trust deed. A solicitor may charge a modest fee if you want a tailored trust, which is more common for larger or more complex estates.

Things to check before you do it

Absolute vs discretionary. With an absolute trust the beneficiaries are fixed and generally cannot be changed later, so choose carefully. A discretionary trust lets your trustees decide, which is more flexible if your circumstances might change.
Policies with a cash-in value. Most term policies have no surrender value, so putting them in trust is simple. If a policy has built up an investment or surrender value (some whole of life policies do), assigning it into trust counts as a gift for inheritance tax. It is usually covered by allowances, but for larger values it is worth taking advice first.
Policies used as security. If a policy has been assigned to a lender for a mortgage or business loan, you may not be able to place it in trust while that arrangement is in force.
Joint policies. Putting an existing joint policy into trust needs a little more thought about who receives what, so it is worth checking with your provider or an adviser.

When to get professional advice

For a simple term policy going into the insurer's standard trust, most people can do this directly with the provider. It is worth speaking to a financial adviser or a solicitor if your estate is large, if the policy has a significant cash value, if you have a complicated family situation, or if you want a bespoke trust rather than the off-the-shelf version. Getting it set up correctly matters, because a trust that is worded wrongly can cause problems later.

Common questions

Can I put an existing life insurance policy into trust, or only a new one?

Either. You can set up a trust when you take out cover, or place an existing policy into trust later. Providers have forms for both.

Does it cost anything to put an existing policy in trust?

For a standard protection policy it is usually free using the insurer's own trust deed. A solicitor may charge a fee for a tailored trust.

Can I take a policy back out of trust or change my mind?

It depends on the type of trust. An absolute trust is generally fixed once set up, whereas a discretionary trust gives trustees more flexibility. This is why it is worth choosing the right type at the start, and taking advice if you are unsure.

Information only. This is general information, not financial, tax or legal advice, and not a personal recommendation. Tax rules depend on your circumstances and can change. Please speak to a qualified, FCA-regulated adviser or a solicitor before acting.