So whereas your “real” assets are covered by your Will, your death in service benefit pays direct to your loved ones, usually according to a nomination you have completed during your lifetime. However, if you don’t think carefully about who should receive your death in service benefit, you might have missed a tax planning trick.  Although it might seem totally logical to nominate your spouse as the recipient, we’d often suggest to people that they use a Trust instead.  Your spouse and other family can still benefit from the money, but it’s set up in a tax efficient way which could see you saving tax of up to 40% of the value of the payment.

This type of trust can be used for death in service benefits, but it also can be used to help avoid tax of pension funds, and life policies.  Even if you’ve thought about your Will, don’t forget this type of tax planning. It doesn’t really have an impact on your day to day financial affairs, and so is something everyone should think about.