Life insurance trust options in the UK come down to two main kinds: an absolute (bare) trust, where the beneficiaries are fixed when it is made, and a discretionary trust, where the trustees choose who is paid, with flexible, survivor's and split trusts built on those. On revocable or irrevocable, the insurers' own wording treats their life policy trusts as ones you cannot normally cancel once made. Below is what Legal & General (L&G), Aviva, Royal London and Vitality say, as read in October 2026.
Which type suits a policy is a legal question as well as a practical one, but an FCA-authorised broker can say which trust forms the insurers they work with offer alongside a new policy. No charge applies, and the broker phones once your details are in on the form on this page.
Which types of trust do life insurers offer?
Each insurer's documents attach their own labels, so one idea can appear under two or three names. Here is how they line up:
| Insurer | Beneficiaries fixed | Trustees choose | Other trusts named |
|---|---|---|---|
| L&G (Protection trusts page, read October 2026) | Absolute Trust | Discretionary Trust | Survivor's Discretionary Trust and Flexible Trust |
| Aviva (Guide to trusts, January 2026; trust page and forms, August 2026) | Bare trust (guide) | Discretionary trust (guide); Discretionary Gift Trust (Protection) (trust page; form AL53003) | Survivor Trust (Protection), for joint policies (trust page; form AL53002) |
| Royal London (trust forms, June 2026) | Bare Trust (also known as an absolute or fixed trust, the form says) | Discretionary Trust | Forms page lists a Deed of Appointment for an Absolute Split Trust |
| Vitality (general guide to trust types, updated 10 September 2025) | Describes an Absolute Trust (also called a Bare Trust) | Describes a Discretionary Trust | Also describes Survivor’s Discretionary, Flexible and Split Trusts |
Aviva's documents do not agree with each other. Its Guide to trusts (EDCO0853, dated January 2026, on Aviva's protection.aviva.com site) says Aviva offers two forms of trust, bare and discretionary. Its consumer trust page offers a Discretionary Gift Trust and a Survivor Trust instead, and the two forms it links (AL53003 and AL53002, both dated August 2026) are held in Aviva's adviser document library. What a trust is in general is explained in what a life insurance trust is, and the trusts and tax guides gather the related pages.
Absolute or discretionary: who decides who is paid?
An absolute trust settles the question at the start. Royal London's Bare Trust form (June 2026) warns that the named beneficiaries and their shares "cannot be altered after the trust is created, even if this is no longer desirable due to a change of circumstances". A later change in the family leaves the list as it was, and if a named beneficiary dies, the form sends their share to their own estate rather than sharing it among the others.
A discretionary trust hands that choice to the trustees: who among a wide group is paid, how much and when. Aviva's trust page says children or grandchildren born after its Discretionary Gift Trust is set up automatically become potential beneficiaries. A letter of wishes can guide them, but L&G's Discretionary Trust guide (W12709, August 2026, kept in its adviser files but linked from its customer trusts page) says they do not have to follow it, so the people you appoint carry real weight; the role is set out in what a life insurance trustee does. Which forms a given insurer attaches to its policies now, the broker can set out at no cost when they ring you back.
What can you change after the trust is made?
| Trust | Beneficiaries afterwards | Trustees and wishes |
|---|---|---|
| L&G Absolute | Cannot be changed (trusts page) | Donor can appoint more trustees at any time (guide W12711 08/26, page 4) |
| Aviva bare (guide) | Fixed at the start, no additions (Guide to trusts, page 4) | Settlor can change the trustees at any time (guide, page 4) |
| Royal London Bare | Beneficiaries, shares and gifted benefits fixed once the trust is created (form P8B0068/9, page 1) | Forms page lists a Deed to Change Trustees |
| L&G Discretionary | Trustees choose from a wide list; others can be added by a deed of addition (guide W12709 08/26, page 5) | Letter of wishes can be rewritten at any time (trusts page) |
| Aviva discretionary (guide) and Gift Trust (trust page) | Additions or exclusions possible at the settlor's request at any time (guide, page 4); Gift Trust: by writing to the trustees (trust page) | Expression of Wishes is not binding on the trustees (guide, page 4) |
| Royal London Discretionary | Donor can add to the list in writing to the trustees (form A P9 PD 0002/4, page 1) | Trustees decide shares (same form, page 2) |
| L&G Flexible | Default beneficiaries can be replaced by discretionary ones at any time; one default must be named at the start (trusts page) | Letter of wishes is non-binding (trusts page) |
Whichever type you pick, the gift is complete from the outset: Aviva's guide notes that a trust, unlike the policy itself, has no cooling-off period. A broker (FCA-authorised) can go through how these changes would fit your family; that call begins when the form on this page arrives.
Are life insurance trusts revocable or irrevocable?
Vitality's guide is the one that uses both words. In its account, the terms of a revocable trust can be rewritten whenever you like and you stay in control, at the price of the inheritance tax advantages that irrevocable trusts carry, while irrevocable trusts "cannot be changed, except in very specific circumstances". The insurers' own wording comes down on the irrevocable side. L&G says a trust "cannot usually be cancelled before it's served its original purpose", Aviva's trust page and its August 2026 forms say you cannot cancel one once it is set up, and a Royal London guide (October 2025) is plain that a policy put in trust "cannot be reversed". So the room for change sits inside the trust, in who is named and who the trustees are. "Living trust", "grantor trust" and "dynasty trust" are mainly American terms.
What do flexible, survivor's and split trusts add?
Flexible. L&G calls its Flexible Trust "like a Discretionary Trust, but it is more complicated": named default beneficiaries receive the proceeds unless the trustees pick someone from the wider list, and it suggests you may wish to take specialist advice first.
Survivor's. For joint cover paying on the first death, L&G's Survivor's Discretionary Trust pays the survivor if they outlive the other by 30 days. Aviva's January 2026 guide also gives 30 days, for a Survivorship Option the couple must select in its bare or discretionary trust, while its trust page and its Survivor Trust form (AL53002, August 2026) give 31 days. More in joint life insurance in trust.
Split. L&G says its trusts are all split trusts, so critical or terminal illness cover "can still be used to benefit the original policy holder (the settlor), while any payment after their death is used for the beneficiaries". In Royal London's forms the critical illness and total permanent disability benefits stay with the donor by default, and gifting them is decided on the form: "you cannot opt to do it later or change your mind". Aviva's trust page says its trusts are not for a Critical Illness Plan, so check what a trust can hold; critical illness policy in trust goes further.
How does the type of trust affect inheritance tax?
What follows is GOV.UK's and the insurers' wording rather than tax advice, and tax law can shift. Among the main situations GOV.UK gives for Inheritance Tax on trusts are assets going into a trust, each 10-year anniversary of its setting up, and assets leaving it or the trust ending. The charge falls on relevant property, which "includes the assets in most trusts". Bare trusts are treated differently: transfers into one "may also be exempt from Inheritance Tax, as long as the person making the transfer survives for 7 years after making the transfer".
L&G applies that divide to its own range: discretionary, survivor's discretionary and flexible trusts are relevant property trusts, absolute trusts are treated as potentially exempt transfers, and under an absolute trust a beneficiary's share is counted in their own estate if they die. Its August 2026 Discretionary Trust guide says a charge may arise at each 10-year anniversary, at a current maximum of 6% and only on value above the trust's available nil rate band; before a claim, the policy's value is likely to be negligible while the person covered is in good health. Royal London's Discretionary Trust form expects exit charges generally not to arise in the first ten years, because the value put in will usually be negligible. Both Aviva and Royal London make the tax position depend on the person setting up the trust not being a beneficiary (for Aviva, nor their estate or personal representatives). Whether a payout counts towards your estate is for does life insurance need to be in trust; using whole of life cover for a tax bill, life insurance for inheritance tax.
Which questions point towards one type or another?
- Might the people to be paid change, through a new child, a divorce or a grandchild?
- Is the policy joint, and should the survivor be paid first?
- Does the policy include critical illness cover you would want to keep for yourself?
These are for you and, if you want one, a solicitor or tax adviser. Trusts with other policies are on relevant life policy in trust and family income benefit in trust. To have a broker line these questions up against your own cover, use the enquiry form here; it takes a couple of minutes.
Frequently asked questions
Can a life insurance trust lend or borrow money?
Aviva's guide says trustees have wide powers to invest the trust fund, insure it or borrow against it, and that trustees of a discretionary trust "also have the power to lend the trust fund to potential beneficiaries of the trust". It recommends legal or other professional advice first.
Can you switch to a different type of trust later?
Vitality's guide says: "You also cannot swap the type of trust you have chosen for a different one." Any change to the terms of a trust also needs your trustees' agreement, it adds.
What if a beneficiary is under 18?
In Aviva's bare trust beneficiaries have a right to the assets from 18. L&G's guides say the trustees can invest the proceeds, and under its Discretionary Trust "may be able to make payments out to support the beneficiaries".
Sources
- Aviva, Guide to trusts (EDCO0853 0126, January 2026), read 22 October 2026. protection.aviva.com
- Aviva, Aviva Trust for Life Insurance, read 22 October 2026. aviva.co.uk
- Aviva, Aviva Discretionary Gift Trust (protection) (AL53003 0826; Aviva adviser library, linked from the trust page), read 22 October 2026. aviva.co.uk/adviser
- Aviva, Aviva Survivor Trust (protection) (AL53002 0826; Aviva adviser library, linked from the trust page), read 22 October 2026. aviva.co.uk/adviser
- Legal & General, Protection trusts, read 22 October 2026. legalandgeneral.com
- Legal & General, Absolute Trust Technical Guide (W12711 08/26; L&G adviser files, linked from its trusts page), read 22 October 2026. legalandgeneral.com
- Legal & General, Discretionary Trust Technical Guide (W12709 08/26; L&G adviser files, linked from its trusts page), read 22 October 2026. legalandgeneral.com
- Royal London, The Bare Trust (P8B0068/9, June 2026), read 22 October 2026. royallondon.com
- Royal London, The Discretionary Trust (A P9 PD 0002/4, June 2026), read 22 October 2026. royallondon.com
- Royal London, Access and download trust forms, read 22 October 2026. royallondon.com
- Royal London, Should I write my life insurance in trust? (13 October 2025), read 22 October 2026. royallondon.com
- Vitality, Life insurance and trusts explained (last updated 10 September 2025; web-archive capture of 17 February 2026), read 22 October 2026. web.archive.org
- GOV.UK, Trusts and taxes: types of trust, read 22 October 2026. gov.uk
- GOV.UK, Trusts and Inheritance Tax, read 22 October 2026. gov.uk