Life insurance trustees - so confused!

Bailey86b · 28 February 2018 at 2:04PM

Good afternoon!
I've recently taken out a life insurance policy and want to put it in a trust but I'm so confused. It's a single policy and in the first instance if want my husband to be the beneficiary to receive the funds to take care of the children so I assume I assign him as a trustee. But my confusion is, do I need to assign a second trustee if my husband happened to pass away at the same time as me so that my young children would still have access to the funds?
If I were to assign my sister would she gain some control over how my husband then used the funds if only I passed away or would my husband still take priority

Any help would be very much appreciated

Weighty1 · 28 February 2018 at 2:32PM

The trustees have equal power when alive so if both your husband and sister were alive and acting as trustees then they would need to be in agreement as to how the money was spent of she could make his life difficult. Your sister would only gain total autonomy over the money if you and your husband died.

However, if you are naming your husband as the beneficiary as well as the trustee then surely your sister would see that you wanted the money to be available for him and the kids and go along with his spending requirements?

I always make sure I recommend my client use a second trustee who they are certain would work in a co-operative manner with the first.

Bailey86b · 28 February 2018 at 7:08PM

Thank you very much, that's very helpful

Bailey86b · 6 March 2018 at 1:38PM

Sorry to come back to this, but is there any way to ensure that 50% of any payout could be kept aside for when my children are 18 if myself and my husband were to pass away? I've heard of a letter of wishes but it states that it's not legally binding. Is this something id have to incorporate into a will? I'm just trying to think worse case scenario really of ensuring my children would benefit from it all

Weighty1 · 6 March 2018 at 3:38PM

A letter of wishes is just about the simplest way of achieving this. It's worth noting that even a trust isn't binding as generally the type of trust used is a flexible/discretionary trust.

My main concern over what you're trying to achieve would be in case both you and your husband both died. What if there wasn't enough money to raise your children in the manner you want them to be raised? Would you want them missing out on school trips/holidays/nice clothes/Christmas and birthday presents, all so this 50% would be available when they are 18, at which point they could potentially go and p*ss it up the wall?

Surely it would be best to give clear instructions within a letter of wishes and then IF, but only if, there is money left when they reach aged 18 does it go to them?

Bailey86b · 6 March 2018 at 7:09PM

That makes sense, something I hadn't considered. I'm assuming a letter of wishes I would get a solicitor to draw up but still not binding?

Weighty1 · 6 March 2018 at 7:23PM

The letter of wishes is something you can just do yourself. Many insurance providers have template letters of wishes or nomination forms, as some call them. All you need to do is record how you'd like the money to be used in the event of a claim. Make it as clear as possible so that the trustee/s know exactly what your intentions are. You can even talk them through it so you can make sure they know what you'd mean.

Life insurance trustees - so confused!

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