The new Flexible Legacy Plan, as it's called, was designed to allow policyholders to set the age at which their beneficiaries can access the capital of their life policy.
It also provides flexibility to enable policyholders to adapt their plan to changes in their circumstances, Lombard said, in officially unveiling the new product yesterday.
The plan is particularly well-suited to those "who may already have used any available nil rate band for inheritance tax purposes", Lombard added.
Based in Luxembourg, Lombard International is a division of FPI, the international arm of Resolution's Friends Life business. Specialising in products for high net worth individuals, it sells into 14 markets and manages assets of more than €23bn.
How the FlexLeg plan works
The Flexible Legacy Plan uses a potentially exempt transfer (PET) for inheritance tax purposes, in order, Lombard says, to achieve a degree of tax efficiency that is no longer possible through more traditional gifting into trusts.
In contrast to planning with discounted gift trusts, "the Flexible Legacy Plan excludes the investor as a beneficiary, while allowing discretionary trustees control over access to policy benefits, via a limited, chargeable lifetime transfer," Lombard said.
Robert MacIntyre, Lombard’s head of wealth structuring solutions, noted that the innovative structuring of life insurance, of which Lombard's new Flexible Legacy Plan is an example, can be a usefully flexible tool for wealth managers.
“Many clients of our distribution partners have worked hard to accumulate wealth, and want their children to benefit, while at the same time not conveying too much control [to them] at too young an age,” he noted.
Such individuals, he added, "are actively looking to make a tax-efficient gift to their loved ones, but with some strings attached".
