The UK wealth manager said the launch should help attract a younger generation towards inheritance tax planning using trusts.

Old Mutual Wealth has launched a lifestyle trust to help people carry out effective inheritance tax planning while retaining flexible access in the future.

Unlike a discounted gift trust, where the right to withdrawals cannot be changed, the lifestyle trust offers greater flexibility to adapt over time according to an individual’s changing needs, the firm said.

The trust allows the settlor to determine the future dates when they may require withdrawals and then decides whether or not to take the entitlement as they approach each date. If the settlor takes the entitlement, or takes no action, the stated policy segments will be moved into a bare trust and can be accessed immediately, at a later date, or assigned to a loved one. If they decide not to take the entitlement, or postpone the entitlement, the funds will stay within the trust, and will continue to be outside of the settlor’s estate for inheritance tax purposes. There will also be flexibility to top-up the trust at any point.

The trust is available to customers who invest in either an Old Mutual Wealth bond in the UK or an Old Mutual International bond. Old Mutual International bond customers may choose to use Old Mutual International Trust Company to run the lifestyle trust on their behalf.

“The lifestyle trust offers the inheritance tax efficiency you would expect from a trust, with the added benefit of flexible access to funds in the future. This flexibility will help make trust planning more attractive to those who might otherwise see trusts as locking away their savings,” said Rachael Griffin, financial planning expert at Old Mutual Wealth.

The launch follows the firm's appointment of its chief information officer, Paul Penney, as its new chief operating officer. Old Mutual Wealth, part of UK-listed Old Mutual, this week agreed to acquire AAM Advisory, a firm working with expats in Singapore.