Trustee responsibility

Legacy_user

I agreed to be the executor of my brothers estate when he made a new will a few years ago when he and his wife split up. This would involve me being the trustee of his assets until his children reached a certain age. This sounded fairly straight-forward.

However what I didn't realise, and he forgot, was that he signed over a life insurance policy for the benefit of the children and I, apparently, am now deemed to be the owner/guardian of that policy.

My brother now wants to cash in that policy and, although I don't particularly care what he does, I'm not sure if I'm allowed to authorise this as surely as trustee I should be protecting the childrens interests. However he's still alive and well and I thought my duties only took over if he died.

Can anyone shed any light on this for me?

martinman3

I am no expert but I would have thought, like you, that you would only become a trustee of his assets should he die before his children reach a certain age. He is free to do what he likes with his assets while he is alive unless he is not of sound mind.

However, if you are actually named on this policy along with the beneficiaries then the life insurance co. will make it impossible for him to cash it in unless you sign to show your agreement.
If that is what you are asking about then I suggest that you post this question on the Insurance & Life Assurance forum.

dunstonh

Trustees have joint and equal liability for the transactions that tax place on the trust. You need to take an interest and you need to be seen to be doing the right thing. If its found out later that your brother has done wrong and you are taken to court, you have equal liability.

However, as MM says above, if the trust hasnt been activated yet then it doesnt matter (he isnt dead so it hasnt). The life policy, unless written in trust, is his to do with as he wishes. He shouldnt even need your signature unless you are on the life policy as well.

If you are on the life policy as a trustee then the trust has been activated and the money does belong to the beneficiaries, not your brother (unless he is a beneficiary). In which case he should not get the money but the trustees of the children should (again assumes children are only beneficiaries and trust is absolute and not flexible).

System

Thank you to both of you. I will ask my brother to clarify what the trust position is and if necessary take legal advice.