Why might a policy written in trust benefit executors if they are also beneficiaries?

A policy written in trust can significantly benefit executors who are also beneficiaries primarily because it can help avoid probate delays, particularly in relation to the inheritance tax (IHT) bill. When a trust is established, the assets held within it are typically not considered part of the deceased's estate for probate purposes. This can allow for a quicker distribution of benefits to the named beneficiaries since the funds in the trust can be accessed without having to go through the lengthy probate process.

In the context of inheritance tax, if executors are waiting for the probate process to conclude, the estate may incur additional costs such as interest on unpaid tax. By having the life insurance policy written in trust, the necessary funds to cover the IHT bill can be made available immediately, which helps in preventing any delays that could affect the estate's liquidity and the timely settlement of debts. Therefore, this arrangement facilitates a smoother transition and reduces potential financial burdens for both the estate and beneficiaries during the probate process.